The last time McDonald’s posted a sharp drop in quarterly sales, most Americans were wiping down groceries and doom-scrolling Covid mortality graphs. This week it was reported that the chain’s US same-store revenues have tumbled 3.6%, a fall twice as steep as Wall Street expected. Confronted with higher prices everywhere, Americans are simply staying home and scrambling their own incredibly overpriced eggs.

McDonald’s CEO Chris Kempczinski has admitted that “people are being more judicious” as traffic from households earning under $75,000 has fallen by nearly 10%, a trend also experienced by the chain’s low-cost competitors. “Judicious” is one word for it; another is “insolvent”. A LendingTree survey from last month found that a quarter of all buy-now-pay-later users are financing their groceries, up from 14% a year ago. When shoppers must use microfinance to buy skimmed milk and Kraft Dinner, the notion of “saving” by choosing a value meal collapses.

America’s macro numbers support this belt-tightening shift. Real GDP shrank 0.3% in the first quarter, the first contraction since the pandemic rebound. At the same time, China posted a 5.4% expansion. The world’s biggest burger chain is learning the hard way that its home market is losing not just momentum but confidence: Donald Trump’s fresh tariff volley has rattled consumers; shaved points off sentiment indices; and reminded workers that even if inflation cools, another round of price hikes can be delivered by press conference.

Hard times once buoyed McDonald’s. In 2008, what was then called the Dollar Menu — the name was discontinued in 2020 due to inflationary pressures — proved a recessionary magnet, lifting global comparable sales 6.9% while sit-down rivals wilted. The chain opened nearly 600 stores that year and boasted 68 straight months of growth. Cheap burgers looked like a counter-cyclical superpower. But 2025 isn’t 2008. Food-at-home prices have risen by 25% since 2021, wages have not kept pace, and many of the customers who used to pop in for a “value” lunch are now using Klarna to split a DoorDash order into four instalments.

The answer from McDonald’s has been more coupons, more gimmicks, and a highly functional “McValue” platform which corrals every two-for-one offer and Monday-only flash sale into a single app tab. Regulars, my Happy Meal-obsessed daughter and me included, scroll through “Deal Drop” notifications as though checking the futures market.

The trouble is that desperation shows. A $5 bundle which includes a Big Mac, fries, and a Minecraft figurine may briefly spike app downloads, but it also telegraphs that management fears further losses. Meanwhile, rival chain Taco Bell managed to buck the low-cost food downturn and post a 9% same-store lift by hawking late-night snack boxes and limited-run melts without signalling panic, essentially doubling down on desperate payments from hungry, cash-strapped Millennials.

Retail analysts note that fast food is traditionally the last rung on the spending ladder: when diners abandon it, they are not so much trading down as dropping out. Lottery-like app deals hide inflation-powered sticker shock, but an individual Big Mac in many US cities now costs over $5 on its own. Downloading an app to shave a dollar off lunch feels like clipping ration coupons, which may explain why some consumers choose the nuclear option: they stop eating out altogether.

Globally, McDonald’s can still point to resilience in Japan and the Middle East, yet in the United Kingdom — another inflation-pinched market — sales slid, following the American pattern. Meanwhile, regardless of whether or not it’s cooking the books, China’s brisk first-quarter growth offers a mirror into which America may not enjoy looking. Beijing is touting double-digit gains in logistics and mid-single-digit rises in retail dining — including 3% growth across 5,900 McDonald’s branches in the country.

When a nation built on consumption can no longer afford its most affordable made-to-order calories, it has moved beyond typical economic cycles into something more profound. The American consumer, long the credit card holder powering global growth, is sputtering not from choice but from exhaustion. The once-shiny golden arches have dimmed not because we want something better, but because millions can no longer afford even that.

---