McDonald\'s (MCD, Financials) posted a 3.6% drop in U.S. same-store sales in Q1 2025 its steepest decline since the early days of the pandemic as more customers, especially from lower-income groups, cut back on spending.
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The 3.6% decline in U.S. sales reflects the company\'s first major stumble in years. It comes as economic uncertainty, largely tied to tariffs, weighs on everyday spending.
CEO Chris Kempczinski said on the earnings call that heightened anxiety around the economy is hitting lower-income diners the hardest. Foot traffic was lower than expected, and the company isn\'t immune to the broader pressures in the industry.
Shifting trade policies under President Trump\'s administration have left both businesses and consumers second-guessing their next moves. Companies are hitting pause on new orders, and shoppers are watching prices more closely.
This slowdown comes as economists warn of a potential recession in 2025. With tariffs threatening to push prices higher, companies like McDonald\'s are starting to feel the pinch on both ends from cautious customers and from rising input costs.
The company said it\'s keeping a close eye on consumer behavior heading into Q2, especially as policy uncertainty and economic concerns linger.
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This article first appeared on GuruFocus.
