Chicago, Illinois – McDonald’s, the global fast-food giant, has recently experienced a decline in sales for the first time in over three years. The drop in sales comes as consumers, particularly those on lower incomes, seek out more affordable options and cut back on dining out due to inflation and economic uncertainty.

In the April-June period, McDonald’s reported a 1 percent decrease in global sales, marking the first decline since the last quarter of 2020 when the COVID-19 pandemic forced the closure of businesses and kept people at home. Particularly hard-hit were outlets in international developmental licensed markets, where sales fell 1.3 percent amidst weak consumer sentiment in China and boycotts in the Middle East.

CEO Chris Kempczinski acknowledged the changing consumer behavior, noting that low-income consumers are now opting to eat at home and find ways to save money. Kempczinski highlighted the shift in consumer spending habits, emphasizing that the loss of low-income consumers outweighs any benefits gained from those who “trade down” to McDonald’s from pricier restaurants.

Despite still being perceived as a value leader in the fast-food industry, McDonald’s recognizes that the gap in value perception compared to competitors has narrowed. In response, the company is working swiftly to address this issue and regain its position as a value leader.

One initiative that showed promise was the launch of a $5 meal deal in June, which exceeded expectations in terms of sales. The promotion is set to be extended at most US outlets beyond August. McDonald’s executives remain optimistic about the future, expressing determination to regain market share in all major markets, regardless of current conditions.

Investors responded positively to McDonald’s plans to improve its fortunes, with shares rising by 4.5 percent on Monday morning. Despite the recent dip in sales, the company remains focused on implementing strategies to drive growth and maintain its competitive edge in the fast-food industry.