McDonald’s is one of the most iconic American brands out there, and it’s done well through times of uncertainty — including during the COVID-19 pandemic, when it was easily able to pivot to delivery and takeout thanks to technology investments it’d been making for years.
That’s why it’s such a troubling sign that the brand has been performing poorly.
"While we anticipated a challenging environment in 2024, our performance so far this year has fallen short of our expectations," CEO Chris Kempczinski said in the company’s Q3 2024 earnings call, reported TheStreet.
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Kempczinski attributes the company’s poor performance, in part, to the fact that "consumers, especially those in the low-income category, were choosing to eat at home more often," and said that this is an industry-wide trend.
However, he also believes part of the problem may be that McDonald’s has "lost its way and ceded an important part of its brand identity to rivals."
Kempczinski’s warnings about McDonald’s are important because of what they say about the economy as a whole. But those who like to eat at McDonald’s should also consider what the statements suggest might happen to the cost of their favorite fast-food meal.
Poor performance at McDonald’s could be a sign of a troubled economy
The downturn at McDonald’s is important for everyone to pay attention to. The drop in sales — especially by people with lower incomes — could mean that people simply do not feel they have the money to eat out right now, even at inexpensive places like McDonald’s.
The data backs this up. A report by PYMNTS revealed that 98% of people who live paycheck to paycheck have changed their behavior to deal with rising prices at restaurants, including eating out less often or “trading down” to lower-cost items on the menu.
This probably isn’t a surprise to most people who have been coping with economic uncertainty in recent years.
In the aftermath of the pandemic, inflation surged to multidecade highs. Food and energy — two essential expenses you can’t escape — saw especially big price increases, and people are feeling the pain.
In fact, the Pew Research Center found that 63% of Americans described inflation as a "very big problem," in 2025, and one that affects their overall perceptions of the economy, with 45% of people saying the economy is only in fair shape and 31% describing it as being in poor shape.
Sadly, the consequences of struggling consumers extend beyond the impact on McDonald’s profits.
"Restaurants are a canary in the coal mine,” Michael Halen, a senior restaurant and food service analyst at Bloomberg Intelligence told Marketplace in 2024.
“Typically, you know, you see a slowdown in consumer discretionary spending in restaurants before you see it in other places.”
If there is a general slowdown in consumer spending, this raises the risk of a recession as reduced demand means companies tend to cut back, which in turn can increase unemployment and lead to further cuts — all of which impedes economic growth.
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McDonald’s is focusing on value, so the price to you could soon fall
While McDonald’s problems may indicate a reason to worry about the economy as a whole, there is a little bit of good news. Kempczinski has said the fast-food chain is going to shift its focus back to providing the best value for customers so people will feel like eating there is within reach — even while overall economic conditions aren’t great.
"We have moved with urgency in partnership with our franchisees to improve our value offerings in most of our major markets," Kempczinski said.
Some examples he cited include discounted happy meals in France, three for 3 pounds meal deals in the UK, and coffee for a dollar in Canada.
"As we have said before, we view good value as including both entry-level items and meal bundles at affordable price points," Kempczinski explained.
This includes Every Day Affordable Price Menus that have "compelling entry-level price points" for things like breakfast, as well as on beef and chicken sandwiches for lunch and dinner.
McDonald’s is not the only fast-food chain looking to capture the limited consumer dollars people feel comfortable spending.
Wendy’s has introduced a $3 breakfast meal, while Jack in the Box plans to offer more value items as well.
“Value is going to be something we talk about for the rest of the year,” Jack in the Box CEO Darin Harris told investors in 2024, reported Restaurant Business, when a slowdown in fast-food consumption was starting to emerge.
“We know the competition is doing that. So we will be in the game.”
So, as McDonald’s focuses on showing people it’s still affordable during challenging economic times, more people may once again start stopping in to the Golden Arches for a good deal — even if economic conditions as a whole have them feeling like they don’t have quite enough.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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