McDonald’s expects price-sensitive Americans to cut back further as a slowing US economy, sticky inflation and higher fast-food prices squeeze household budgets.
While the burger chain’s quarterly results showed rising global sales, executives warned that low-income consumers are reducing visits and spending less per order, signalling a tougher backdrop for the wider quick-service restaurant (QSR) industry.
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Consumer strain weighs on traffic and average spend
Chief executive Chris Kempczinski said the company continues to see a “bifurcated” US customer base. Traffic from lower-income diners fell by nearly double digits in the third quarter, a trend that has persisted for almost two years, while higher-income traffic rose by a similar rate.
For many families, inflation-adjusted incomes have eroded, making discretionary purchases—such as eating out—easier to skip.
Rising menu prices across the sector have also sharpened value comparisons, with some combo meals now around $10, prompting budget-conscious customers to trade down, cook at home or seek cheaper alternatives.
McDonald’s expects these pressures on consumer spending to extend well into 2026 as uncertainty over jobs and wages tempers demand.
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By GlobalDataSales rise despite earnings miss
For the quarter, McDonald’s reported global same-store sales up 3.6%, reversing a year-earlier decline. In the US, like-for-like sales rose 2.4%, ahead of market expectations, driven by a higher average cheque even as some customers visited less often.
Revenue increased 3% to $7.08 billion, slightly below analyst forecasts of $7.1 billion. Adjusted earnings per share were $3.22 versus the $3.33 expected, with a higher effective tax rate weighing on the bottom line.
Net income was $2.28 billion, or $3.18 per share, compared with $2.26 billion, or $3.13 per share, a year earlier.
The results underscore how the brand’s scale and menu breadth can support sales in a challenging environment, even as the company prepares for continued pressure on lower-income consumers.
Value offers return as competition intensifies
With fast-food prices under scrutiny and “value menu” searches trending, McDonald’s has leaned into affordability to defend traffic.
The chain brought back Snack Wraps in the US for the first time in nine years at $2.99, and nearly one in five customers purchased one during the launch period, according to management.
Extra Value Meals were also reintroduced to sharpen perceived value. These steps come amid intense “value wars” across US fast food, where rivals are promoting low-price bundles to capture cost-conscious diners at breakfast and dinner.
While such offers can support visit frequency, they also test margins if commodity and labour costs remain elevated.
McDonald’s said gains in average check helped offset fewer visits, but sustained discounting across the industry could keep pricing tactics in focus over the coming quarters.
International markets provide momentum
Outside the US, McDonald’s reported stronger growth, highlighting geographic diversification as a buffer to uneven domestic trends and a possible US economic slowdown.
Same-store sales in its International Operated Markets—which include Australia and Canada—rose 4.3%, supported by established value platforms that the company said are resonating with customers.
In its International Developmental Licensed Markets segment, comparable sales grew 4.7%, lifted by demand in Japan.
Continued international momentum may help balance softer US traffic from lower-income households, though currency swings and regional cost inflation remain watch points for global operators.
As the US consumer landscape cools, McDonald’s is signalling that low-income Americans will keep tightening their belts.
For retailers and restaurants alike, the near-term playbook centres on sharp pricing, clear value and targeted promotions—while keeping an eye on margins as the cost-of-living squeeze reshapes how and where people eat.
