McDonald's Sees 3.6% Drop in U.S. Same-Store Sales Amid Economic Uncertainty
McDonald's reports a 3.6% decline in U.S. same-store sales, the largest drop since Q2 2020, amid heightened economic anxiety and competition.
McDonald's, a stalwart American fast food chain, posted a steep sales drop at U.S. restaurants in its first quarter earnings report Thursday, citing economic uncertainty and diminished consumer sentiment.
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The disconnect between what consumers say and what they do points to another explanation about the lackluster sales of quick service restaurants: the growing competition and market saturation that may end up “cannibalizing” sales across brands while limiting their pricing power.
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McDonald’s reported its worst domestic quarterly sales since 2020 as the economy responds to President Donald Trump’s tariff agenda.
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McDonald’s same-store sales fell 1% globally in the first quarter, as growing traffic in Japan, China and the Middle East failed to overcome weakness in markets like the U.K.
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The firm's latest drop in sales coincided with a contraction in the US economy, which shrank at an annual rate of 0.3% in the first three months of 2025.
McDonald's posts biggest US sales drop since Covid-19 pandemic
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That reflects the economy writ large: While less-well-off consumers rein in transactions to focus on essentials, wealthy consumers continue to spend freely.
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Summary
In its first quarter earnings report, McDonald's announced a 3.6% decline in same-store sales in the U.S., marking the biggest drop since the COVID-19 pandemic. CEO Chris Kempczinski cited heightened economic uncertainty, largely due to tariffs, affecting lower and middle-income consumers. Traffic to U.S. restaurants fell more sharply than expected, with global sales also dropping by 1%. This decline follows similar drops from other chains, indicating broader economic pressures. Despite new value offerings, the company’s struggles reflect increased competition and shifting consumer spending habits. Kempczinski remains optimistic about McDonald's resilience in tough market conditions.
Perspectives
McDonald's faced a steep 3.6% decline in same-store sales in the U.S. during the first quarter, the largest drop since the pandemic, primarily due to heightened economic uncertainty and consumer anxiety driven by external factors such as tariffs.
Traffic to McDonald's U.S. restaurants decreased more sharply than expected, impacting lower- and middle-income consumers significantly, while concerns about potential inflation from tariffs have led consumers to cut back on discretionary spending.
Despite the declines, CEO Chris Kempczinski expressed confidence in the company's ability to navigate difficult market conditions and is introducing new value offerings like the Buy One, Add One for $1 deal to attract customers.
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