McDonald’s sales drop amid persistent inflation worries

McDonald’s on Monday reported that sales at U.S. stores open at least a year fell 0.7% last quarter from the same period a year earlier, dragged down by fewer customers going to the fast-food company’s restaurants. McDonald’s isn’t alone: Starbucks, Burger King, Wendy’s and other rivals are also reporting less foot traffic and lower overall sales as consumers pull back their spending on food away from home.

Several factors were operating against McDonald’s this past quarter, including a tough comparison to last year. In the same quarter a year ago, McDonald’s got a 10.3% sales boost, mostly attributed to its viral Grimace shake — a purple, sugar-loaded drink in honor of Grimace’s “birthday.” The shake became a sensation after TikTok users posted videos of themselves pretending to die after drinking the shake.

But McDonald’s also has said for the past several quarters that some customers — particularly low-wage earners — are revolting against what many see as bad value. So the company at its March investor day unveiled its new strategic plan, dubbed “Accelerating the Arches,” to lure back price-conscious customers. The plan focuses on value meal plans like the popular $5 meal introduced earlier this summer.