McDonald's sees its biggest sales drop since the pandemic as customers fearful of economy pull back on spending
McDonald's has reported its biggest sales drop since the pandemic as customers in the U.S. are concerned about the economy and are pulling back on spending.
The fast food chain's U.S. sales shrank 3.6 percent, the worst drop since the second quarter of 2020, as the company acknowledged customers are 'grappling with uncertainty.'
'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,' McDonald's CEO Chris Kempczinski said in a statement.
The restaurant's sales at locations that have been open for at least a year fell 1 percent globally in the January-March period.
Wall Street had been expecting an increase of nearly 2 percent, according to analysts polled by FactSet.
The fast-food giant has dealt with customers being more selective in their spending. In recent months, the company has made changes to try and lure customers back with deals and offers.
McDonald's has responded by expanding its U.S. value menu, which lets customers buy one item for $1 when they buy a full-priced item. It's also offering its $5 Meal Deal through this summer. That deal was introduced last June and extended several times.
But Thursday's results suggest that the affordable menu hasn't gone far enough to help ease the anxiety of consumers against the backdrop of a global trade war, Bloomberg reported.
The results come as President Donald Trump marked 100 days in office this week, during which time he has overseen a turbulent economy because of his trade tariffs.
Trump addressed the shaky economy at a cabinet meeting Wednesday and acknowledged that his tariffs could result in fewer and costlier products in the U.S.
'Well, maybe the children will have two dolls instead of 30 dolls. So maybe the two dolls will cost a couple bucks more than they would normally,' Trump said.
The president, who is fond of the fast food chain, hit McDonald's on the campaign trail last year, where he served fries at the drive-thru.
AP contributed
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