McDonald's sees biggest drop in sales in five years as CEO speaks out
Over the past year, there have been reports of McDonald’s struggling to maintain its longstanding momentum at the top of the fast food game.
While the picture could certainly be worse, reports dating back to July 2024 show McDonald’s reconsidering its pricing strategies amongst a dip in sales, and it seems that dip has been sustained.
It was reported by AP on May 1st 2025 that McDonald’s experienced a bigger drop in store traffic than predicted over Q1 2025, with economic uncertainty leading consumers to spend more cautiously.
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The issue is most pronounced in the US, where same-store sales dropped by 3.6% across outlets that had been open for a year or longer.
This represents McDonald’s biggest drop off in sales since the Covid pandemic began in 2020, when sales were naturally impeded by stores closing around the world.
In a conference call with investors on May 1st 2025, Chairman and CEO Chris Kempczinski pointed to consumer cautiousness among low and middle-income earners across the January-March period.
He said that industrywide traffic from consumers earning $45,000 or less (c.£33,800) was down by double digits, with middle-income earners showing a similar decline. Apparently traffic from customers earning $100,000 (c.£75,000) or more has been relatively static.
“We believe McDonald’s can weather these difficult conditions better than most,” he said.
“However, we’re not immune to the volatility in the industry or the pressures that our consumers are facing.”
According to AP, other fast food brands have reported similar sales dips. Yum Brands – which owns KFC, Taco Bell, and Pizza Hut among others – said its same-store sales fell by 2% across Q1. Chipotle also reported a same-store sales decline year-on-year over the first quarter.
Worldwide, McDonald’s same-store sales dropped by 1% over Q1, with growth in Japan, China and the Middle East offsetting the decline seen in markets like the US and UK.
Factoring in the extra day from 2024 being a leap year, McDonald’s said same-store sales were flat year-on-year. A 2% increase had been predicted by Wall Street, according to an analyst poll conducted by FactSet.
In a bid to tempt cash-strapped customers back to its stores, McDonald’s has introduced a new McValue menu in the US that allows customers to buy one item for $1 when they buy another item at full price.
In the US there’s also a $5 meal deal that was first introduced in June 2024 for a limited time, only for its run to be extended on a few occasions already.
While Q1 was disappointing for the fast food giant, Kempczinski said there was strong traffic in April thanks to a Minecraft Movie meal tie-in across 100 countries, along with new menu items pricking consumers’ ears.
McDonald’s remains committed to its full-year financial targets, and Kempczinski told investors that anti-American sentiment from Canada and Northern Europe didn’t seem to be impacting McDonald’s reputation among consumers in those territories.
On May 1st 2025, McDonald’s shares were down by 1% in morning trading.
Rachael Davis