The McRecession hits fast-food chains
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Sarah Grillo/Axios
Call it the McRecession.
The big picture: Low- and middle-income consumers are increasingly shying away from fast-food restaurants like McDonald's, a sign that people are pinching pennies amid recession fears.
- The number of low-income consumers visiting U.S. fast-food restaurants was down "nearly double digits" in the year's first three months compared to 2024, McDonald's CEO Christopher Kempczinski said Thursday.
- Visits from middle-income consumers across the industry "fell nearly as much," he added.
Zoom out: Concerns about job losses and fears about price hikes from President Trump's tariffs have fueled what Conference Board senior economist Stephanie Guichard recently called "pervasive pessimism about the future."
- And that's translated into fewer people coming through the door at McDonald's and other fast-food restaurants.
- "Economic pressure on traffic has broadened," Kempczinski said. "I think we are seeing that people are just being more judicious about cutting back on visits."
- One way the trend is manifesting: People are skipping breakfast "or they're choosing to eat at home," Kempczinski said.
Threat level: Signs of a fast-food slowdown are spreading.
- U.S. comparable sales fell 3.6% at McDonald's, the company's worst showing since the pandemic.
- Starbucks' comparable sales declined 1% in the quarter, the coffee giant announced Wednesday, its fifth consecutive quarterly decline.
- Domino's Pizza said consumers are gravitating from more expensive delivery options to cheaper carryout.
- And Wingstop CEO Michael Skipworth flagged "a meaningful pullback in our business" in "specific pockets," including Hispanic customers and "lower middle income" consumers.
Meanwhile, data from Placer.ai, which analyzes customer activity, shows visits fell 1.4% across the overall dining segment in the first quarter, with quick-service and fast-casual chains seeing a 1.4% drop.
- Chipotle's comparable restaurant sales decreased 0.4% in the first quarter of 2025 — its first decline since COVID lockdowns in 2020.
Yes, but: The slowdown isn't happening everywhere.
- Taco Bell is on a roll. The Yum Brands chain posted a U.S. comp sales increase of 9% in its most recent quarter.
- Chris Turner, Yum Brands chief financial and franchise officer, credited Taco Bell's expansion of luxe value boxes as delivering "exceptional value across income levels, with the $5 Luxe box becoming a massive win with low-income consumers."
- Taco Bell's reputation for value, however, could also be exacerbating the trend for competitors, as consumers look to treat themselves at a lower cost. The chain is "well positioned to navigate this environment... with an opportunity to take share from higher-priced competitors," Turner said Wednesday.
What to watch: Restaurants will continue to focus on value menus, adding new items and limited-time offerings to bring consumers back in.
- Kempczinski said the launch of new chicken strips and the upcoming return of snack wraps should help McDonald's improve.
- McDonald's CFO Ian Borden said the company may adjust its current McValue offerings over time but that for the rest of 2025 will "continue to include everyday value meal deals starting at $5."
More from Axios:
