McDonald's has suffered its biggest drop in US sales since the height of Covid, a fall that it said was driven by wider concerns about the US economy. The world's largest burger chain's revenue at US stores open at least a year sank 3.6% in the first three months of 2025 compared with the same period in 2024, as customers reduced their visits. It marked the steepest decline in like-for-like sales in the US since the three months to the end of June 2020 when many pandemic restrictions were still in place. Chief executive Chris Kempczinski said customers were "grappling with uncertainty" but assured investors that the firm could "navigate even the toughest of market conditions". McDonald's has beenworking for months to try to re-ignite its business, after facing backlash from customers, especially lower income households, over rising prices. 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. It marked the first quarterly decline since 2022. The figures reflected just over two months of Donald Trump's presidency - as many firms and consumers reacted with confusion to his barrage of tariff announcements - but not his "Liberation Day" tariff plans on 2 April Over the same three-month period, the slump in McDonald's US sales dragged its overall like-for-like revenue down 1% even as sales in Japan, Australia, and the Middle East grew. Mr Kempczinski said: "Consumers today are grappling with uncertainty, but they can always count on McDonald's [...] for exceptional value". "McDonald's has a 70-year legacy of innovation, leadership, and proven agility, all of which give us confidence in our ability to navigate even the toughest of market conditions and gain market share," he added. Businesses have had a mix of reactions since Trump began revealing and enforcing his plans for tariffs, which are a tax payable by a person or firm buying a good from overseas. This week,technology giant Intel saidcosts would rise and a recession was more likely because of Trump's tariffs. Sportswear brand Adidas said they would lead tohigher prices in the US for popular trainers including the Gazelle and Samba. Meanwhile, delivery giant DHL paused deliveries worth more than $800 (£603) due to US trade policy beforelifting them after negotiating "adjustments" to customs rues. Trump and his allies have said the policies will help to bring more jobs to the US as firms base factories and operations the country to avoid the new taxes. However, many companies and economists have said this will be difficult to achieve and will likely mean job losses and economic pain at least in the short term. Reacting to yesterday's economic figures, Trump said he needed"a little bit of time"- calling the numbers a reflection of the "Biden economy", a reference to the former president.
McDonald's posts biggest US sales drop since Covid
TruthLens AI Suggested Headline:
"McDonald's Reports Largest U.S. Sales Decline Since COVID-19 Pandemic"
Bbc News
7.6
TruthLens AI Summary
McDonald's has reported its most significant decline in U.S. sales since the peak of the COVID-19 pandemic, with revenue at U.S. locations open for at least a year dropping by 3.6% in the first quarter of 2025 compared to the same period in 2024. This downturn is attributed to broader economic concerns, as consumers have reduced their visits amid uncertainty regarding the U.S. economy, which also experienced a contraction of 0.3% in the same quarter. This marks the first quarterly economic decline since 2022, coinciding with a turbulent period under former President Donald Trump's administration, characterized by unpredictable tariff announcements that have left many businesses and consumers confused. McDonald's Chief Executive Chris Kempczinski emphasized the company's resilience, stating that despite the challenging market conditions, McDonald's remains committed to providing exceptional value to its customers, particularly in light of recent price increases that have drawn criticism from lower-income households.
The drop in sales at McDonald's has had a ripple effect, causing a 1% decline in the company's overall like-for-like revenue, even as international markets, such as Japan, Australia, and the Middle East, reported growth. The situation reflects a complex interplay of domestic economic challenges and external factors affecting consumer behavior. In response to the economic landscape, Kempczinski reassured investors of the company's longstanding legacy of innovation and agility, which he believes will help McDonald's navigate the current difficulties and regain market share. Meanwhile, reactions to the economic situation have varied among businesses, with companies like Intel and Adidas warning about rising costs and potential job losses stemming from the tariff policies implemented by the Trump administration. The ongoing discourse surrounding these economic policies suggests a challenging road ahead for both consumers and businesses as they adapt to the evolving economic climate.
TruthLens AI Analysis
The recent report about McDonald's experiencing its largest sales drop in the US since the peak of the Covid pandemic raises several important points for analysis. The article highlights the challenges the fast-food giant faces amid economic uncertainty, particularly for lower-income consumers.
Sales Decline and Economic Context
McDonald's reported a 3.6% drop in comparable sales in the first quarter of 2025 compared to the same period in 2024. This decline is particularly significant as it reflects broader economic concerns, including a contraction in the US economy. The mention of the first quarterly decline since 2022 suggests that this downturn may not be an isolated incident but part of a larger trend affecting various sectors. The CEO's comments about customers grappling with uncertainty indicate an effort to acknowledge consumer concerns while trying to maintain confidence among investors.
Customer Sentiment and Pricing Strategy
The article points to backlash from customers, especially those from lower-income households, regarding rising prices. This indicates that McDonald's must address not just sales figures but also customer perceptions of value. The CEO’s assurance of McDonald's ability to provide "exceptional value" suggests a strategic shift may be necessary to regain consumer trust and increase visits.
Political and Economic Implications
The mention of Donald Trump's presidency and the confusion surrounding his tariff announcements adds a political dimension to the economic narrative. Companies like McDonald's operating in a volatile political environment may struggle with planning and pricing strategies, which could further impact sales.
Comparative Performance
While US sales are declining, sales in other regions, such as Japan, Australia, and the Middle East, are reportedly growing. This disparity may suggest that McDonald's needs to reevaluate its strategies in the US market while leveraging successful tactics from its international operations.
Impact on Market and Perception
This news could influence stock performance for McDonald's and related sectors, as investor sentiment often reacts to such significant sales drops. The narrative constructed around the company's struggles may lead to broader implications for consumer-focused businesses facing similar economic pressures.
Community Response and Support
The article seems tailored to resonate more with consumers concerned about economic stability, particularly lower-income groups. By addressing these consumers directly, McDonald's aims to rebuild trust and support within this demographic.
Manipulative Aspects
While the article presents factual data, the emphasis on economic uncertainty and consumer value may carry an undertone aimed at reassuring investors. The language used by the CEO could be seen as an attempt to manipulate public perception positively, framing McDonald's as a resilient player amidst challenges.
In conclusion, while the report provides a clear picture of McDonald's current challenges, it also serves a dual purpose: informing the public and reassuring stakeholders about the company's resilience. The manipulation factor appears moderate, primarily due to the strategic language employed to maintain investor confidence.