McDonald’s US Sales Decline as Consumers Cut Back on Dining Out

McDonald’s reported a bigger-than-expected decline in US comparable sales for the third quarter as financially strained consumers reduced spending on dining out, marking the burger chain’s first sales drop in six quarters. Comparable sales in its largest market fell 0.2% in the quarter ended September 30, missing analysts’ expectations of a 0.1% decline. Customer traffic also remained weak, with restaurant visits falling 4.6% year-on-year, despite the company’s efforts to attract budget-conscious customers through affordable meal deals and promotional offers.

The company has introduced several value-focused initiatives over the past two years, including an under-$3 menu and a $4 breakfast meal, as consumers increasingly turn to cheaper alternatives. However, these measures have yet to deliver a sustained recovery in customer traffic. CEO Chris Kempczinski said the company was encouraged by improvements as the quarter progressed following its value initiatives. Meanwhile, global comparable sales increased 1.5%, in line with market expectations. Competitors, including Burger King and Taco Bell, have also been using discounts and promotions to attract customers.

Despite the decline in US sales, McDonald’s shares rose 2.4% in premarket trading after the company reported better-than-expected quarterly earnings. Adjusted earnings increased to $3.57 per share from $3.22 a year earlier, exceeding analysts’ estimates of $3.38, supported by an approximately 4% reduction in operating costs and expenses. The company is also implementing its new turnaround strategy, NEXT, announced in June, focusing on streamlined operations, modernised restaurant designs and employee training to improve efficiency and strengthen long-term business performance.

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