Higher gas prices and inflationary pressure from the war in Iran are having a disproportionate impact on low-income customers and it could get worse, fast food giant McDonald’s is warning.
The world’s biggest burger chain posted U.S. same‑store sales growth of 3.9 per cent in the first quarter, missing analyst expectations of a 4.2 per cent increase.
“I think probably it’s fair to say that (the macro-economic environment) it’s certainly not improving, and it may be getting a little bit worse,” McDonald’s CEO Chris Kempczinski said in an earnings call on Thursday.
“We’re measuring success in two ways: our ability to grow share with low-income consumers and our ability to improve value and affordability scores,” he added.
McDonald’s has emphasized value meals in their menu with the aim of growing their share of low-income customers as the cost-of-living worsens.
“You need, in this environment, value and affordability to be a strength,” Kempczinski said.
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“We’ve listened closely to our customers and adjusted along the way with a relentless focus on strengthening our value leadership,” he added.
In mid‑April, McDonald’s expanded its McValue platform in the U.S., adding everyday menu items priced under US$3, such as the US$2.50 McDouble and a US$1.50 Sausage McMuffin, alongside a US$4 breakfast meal deal.
In January, McDonald’s Canada started offering its McValue Meal to Canadian customers for $5 and a small coffee for $1 in a bid to attract low-income customers.
But the fuel crisis and inflationary pressured caused by the war in Iran has had a disproportionate impact on McDonald’s low-income customer base, Borden said.
“Gas prices inflation is going to disproportionately impact low-income consumers. We expect the pressures there are going to continue,” chief financial officer Ian Borden said in the call.
Cost pressures are affecting franchisee cash flow, even where sales remain positive, and are also weighing on margins at U.S. company‑operated restaurants, the company said, adding it would review its franchisee network.
Several U.S. restaurant chains such as Shake Shack, Papa John’s, Wingstop and Domino’s have reported weaker quarterly sales growth, citing fallout from the Iran war.
Lower-income consumers are becoming more selective, Wall Street analysts have said, increasingly trading down to simpler, single‑item orders rather than full meals.
Higher beef prices in the European and North American markets has meant some customers are shifting to chicken, Kempczinski said.
“When beef prices are as elevated as they are, chicken becomes a much more attractive value opportunity relative to beef,” he said.
–with files from Reuters
You ever think, maybe, the “expert” bean counter analysts are wrong???
Your food is bland and your employees cannot get the simplest of orders right. Sorry it is not price but service and quality that is driving people away. Burger King for me.
McDonalds’ and other fast food restaurant prices did not skyrocket in the last few months. They have been high for several years since covid. To blame the war and gas prices, while corporately convenient, does not tell the true story. Fast food restaurants are pricing themselves out of business. They offer a convenience at a price and I personally will continue to cook at home.
Thank a liberal politician
Slap a liberal voter
What the hell does McDonalds know? They’re price gouging everyone and now pretending to care about the low income folks?! GTFOH
Sigh ….. when it comes to food prices these days there’s not much to be McHappy about.
Not really an issue, just need to alter the menu to access the diversity marketplace, people from India don’t eat beef.
Buy one of those store pre-cooked chickens…actual food for a way better deal.
@ Ken, Peter, and Mark.
zzz…zzz…eat zhit with the zzz…posts…
or eat a mac.
“Straining” is the right word.
Goes through like grass through a goose.
Be careful pharting.
In 1972 the average corporate tax rate was 40%. We had money for strong social programs, the health system ran smoothly and most people were living good lives. Fast forward to 2026. The average corporate tax rate is 12%. There is no social safety net, health care is a disaster and most of us live in poverty despite working full time. Connect the dots.
mark nit get preachy but have yiu considered beans and rice its really good for you and tastes good too i used to be real poor lived on 5 bean soup i would slice a hotdog razer thin and put that in got nice flavour. goooo carney
Lower income customers like me have stopped going to fast food chains all together. Even as I write this I have one bottle of mayonnaise and 4 yogurts in my fridge. Nothing else.
McDonalds meal deals doubled or tripled in the last few years. Probably much more than inflation.
There’s nothing like a big mac for constipation. Goes right through.
trump’s taxes are hurting people? Oh yeah, he calls them tariffs to fool people.
All you see there is fat pigs anyway
Jesus Christ censorship is getting stupid on the rag! fascism running amok. Simple folks, show some guts and stop eating there! $18 for a terrible burger, sloppy and so full of frigging special sauce and shredded lettuce. The meat has the texture of sawdust, under a rubber bathtub stopper that doubles as cheese. So gross and zero food value.
just saw a billboard with 5 dollar meal now thats a loss leader considering the price of beef. i dont eat fast food burgers any nore. the prices should be higher. even ,16 seems low steer going fir uo to $5 a pound at auction thats live weight. something diesnt add up. goooo carney
everythings 20 bucks two burgers 20 bucks couple of drinks 20 bucks some fries 20 bucks just looking at the golden arches 20 bucks no way man
Now McDonald’s has gotten so bad they even charge 25 cents for the little bag they put sausage McMuffins in. Plus they deliberately make their items smaller and charge more. That was the final straw for me. I’m never going back.
McDonalds used to be garbage food at garbage prices,, Once the dollar menu, and 16$ meals happened, no thanks.
I only go there to drink soda or coffee on occasion. I don’t buy junk food from there.
Much prefer to cook and eat at home.
When I have to repeat myself 5 times to order a Big Mac that’s half the size and twice the price it used to be I just give up.
I went to a sit down restaurant that we were in and out in 1/2 hour. Cost less but more with tip cause the waitress was awesome. And I didnt feel like garbage afterwards….cause of things. Im going lunch restaurants first and foremost. Cause “fast food” is not fast, delicious, reasonably priced anymore.
Just stay away from American junk food.
Carney and Trudeau have done nothing to help food insecurity.
I agree it’s all greed. In Canada we really felt it during COVID and the corporation just ran with it they are raking in the profits and we well can’t afford it and r getting tired of it and no help in site.
Nope, it’s just greed; in fact that’s all inflation is. It’s record profits year over year while raising prices and serving garbage. It’s replacing your entire staff with foreigners and delivering ever-worse service. It’s 2026, you don’t need to sugarcoat anything guys, you’re just a typical corporation.