McDonald's Says Middle-Income Americans Are Feeling Squeezed Now Too

Key Takeaways

McDonald's ( MCD ) traffic has dropped as economic pressure spreads from low- to middle-income consumers, executives said Thursday.

Weak consumer confidence dragged down business more than anticipated, executives at the fast-food giant said during a quarterly conference call Thursday. Low-income Americans have been visiting restaurants less for a while, CFO Ian Borden said, but traffic among middle-income households was down nearly double digits in the first quarter compared with the same period last year.

Inflation, high interest rates and other economic pressures have been weighing on lower-income consumers, Borden said, according to a transcript made available by AlphaSense. "That's spilling over into middle-income consumers right now," he added.

Comparable Sales, Revenue Both Fell in Latest Quarter

Comparable sales at U.S. McDonald's locations fell 3.6% year-over-year in the quarter ended March 31, declining more than analysts expected . The burger giant also missed revenue estimates, reporting $5.96 billion in sales that marked a 3% year-over-year decline.

Fewer morning visits, in particular, may be a bellwether, CEO Chris Kempczinski said. "You're seeing people are choosing either to skip breakfast or they're choosing to eat at home,” he said, according to the transcript.

To appeal to those on a budget, McDonald’s will continue offering value meal deals for as little as $5 for the rest of 2025, Borden said. McDonald’s draws a larger share of low-income and middle-income diners than some others in the industry, according to Borden.

McDonald’s shares fell nearly 2% on Thursday. In the last year, they have gained about 14%.

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