McDonald’s Sales Decline as Demand Slows Despite Value Deals

 

McDonald’s has reported a significant decline in sales, revealing a 1.5% drop in global sales for stores open at least a year from July to September — the biggest dip in four years and more than double analyst projections. This marks the second consecutive quarterly decline since 2020, reflecting the challenges faced by the fast-food giant amid rising food prices and cautious consumer spending across the U.S., Europe, and China.

U.S. sales saw modest growth of 0.3%, but international markets experienced a 2.1% downturn, led by drops in France and the U.K. McDonald's net profits have also dipped by 3%, totaling $2.3 billion. The company cited weakened consumer spending in China and the ongoing Middle East conflict as factors affecting its licensed business, which recorded a 3.5% drop in revenue.

Amid the challenges, McDonald's has faced additional pressure following boycotts due to its perceived political stance. The company recently reacquired its 30-year-old Israeli franchise from Alonyal, which operates over 225 locations. Shortly after the October 7 attack by Hamas, Alonyal announced meal donations to the Israeli military, which intensified public criticism.

In response to declining sales, McDonald's has introduced value-based meal promotions, offering £5 meal bundles in the U.K. and $5 deals in the U.S. to attract budget-conscious customers, competing with rivals like Wendy’s and Burger King.

Additionally, an E. coli outbreak linked to McDonald's Quarter Pounders has impacted operations, with cases affecting 75 people and resulting in one fatality. The outbreak has been traced to slivered onions from a single supplier in Colorado, leading McDonald's to halt sales of Quarter Pounders in 20% of its U.S. locations and cease purchasing from the affected supplier. McDonald’s CEO Chris Kempczinski reassured the public, stating the issue was under control and reaffirmed the company's commitment to food safety.

Chief Financial Officer Ian Borden expressed optimism, highlighting a focus on rebuilding consumer confidence and returning the U.S. market to positive momentum.