McDonald’s Reports First Global Sales Decline in Three Years Amid Economic Pressures

In a significant shift, McDonald’s has announced its first decline in global sales in over three years, with a 1 percent drop reported for the April-June period. This downturn marks the first since the pandemic's peak in late 2020, as inflation-stricken consumers increasingly opt for cheaper dining alternatives and reduce their overall eating out. The decline was particularly pronounced in international developmental licensed markets, where sales fell by 1.3 percent, driven by weak consumer sentiment in China and ongoing boycotts in the Middle East linked to the company's perceived stance on Israel. CEO Chris Kempczinski highlighted a shift in consumer behavior, noting that while some customers have traded down to McDonald’s from pricier restaurants, the fast-food chain is losing more low-income consumers than it is gaining. Many of these consumers are opting to eat at home and find other ways to economize, which has impacted sales. Kempczinski acknowledged that although McDonald’s is still viewed as a value leader in the fast-food sector, the competitive edge in value has diminished. In response to these challenges, McDonald’s has introduced a $5 meal deal that has exceeded sales expectations, prompting plans to extend the promotion at most U.S. locations beyond August. Kempczinski expressed a commitment to reigniting growth across major markets, emphasizing that while recovery will take time, it is achievable. Despite the disappointing sales figures, McDonald’s shares rose by 4.5 percent on Monday, reflecting investor confidence in the company’s strategic plans to recover and strengthen its market position.