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By Hugh Cameron
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The CEO of McDonald's has warned that customers are increasingly skipping breakfast when dining at the fast-food chain, interpreted as a signal of the growing pressures faced by cash-strapped Americans in 2025.
In an interview with CNBC on Tuesday, Chris Kempczinski said that lower- and middle-income consumers "are under a lot of pressure in our industry."
"Traffic for lower income consumers is down double digits," he said. "And it's because people are either choosing to skip a meal—so we're seeing breakfast, people are actually skipping breakfast—or they're choosing to just eat at home."
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Newsweek has contacted McDonald's via email for comment.
Why It Matters
As recent data on consumer confidence has revealed, Americans are increasingly pessimistic about the U.S. economy and their own financial outlook in 2025. This is despite strong performances from U.S. equities and large-cap companies this year, underscoring what Kempczinski described as America's "two-tier" economy. Analysts anticipate that President Donald Trump's tariffs will likely have the greatest impact on lower-income Americans, as companies pass the cost of their increased import taxes onto their customers.
Consumer spending accounts for roughly two-thirds of U.S. GDP, and while richer Americans drive the bulk of this—50 percent according to Moody's Analytics—declines among lower-income groups could hurt companies such as McDonald's which rely heavily on this group. Amid these challenging conditions, a number of businesses, McDonald's included, are attempting to avoid a further exodus by rolling out new value meals for struggling customers and even reviving "recession specials," a strategy popularized during the 2008 financial crisis.
What To Know
As Kempczinski noted on Tuesday, sales among less wealthy customers have dropped significantly in recent months, a trend McDonald's has observed throughout 2025.
In an earnings call following its first-quarter results, Kempczinski said that restaurant sales had fallen more than anticipated, dropping by "nearly double digits" among lower income U.S. consumers versus the same quarter last year.
"Traffic growth from the high income cohort remained solid, illustrating the divided U.S. economy where low and middle income consumers in particular are being weighed down by the cumulative impact of inflation and heightened anxiety about the economic outlook," said Kempczinski.
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According to results released in early August, McDonald's U.S. restaurant sales grew 2.5 percent year-over-year in the second quarter, following two consecutive quarters of domestic declines. However, the company noted another double-digit decline with its less affluent customer base.
"We've got to work even harder to make sure we're attractive for all consumers, including the lower income consumer," said Chief Financial Officer Ian Borden during a subsequent earnings call.
To this end, McDonald's announced on Tuesday that it will be reviving its "Extra Value Meals" beginning September 8. These include a $5 Sausage McMuffin with Egg meal, an $8 Big Mac meal, and several other limited-time offers.
What People Are Saying
McDonald's CEO Chris Kempczinski, during his appearance on CNBC Squawk Box, said: "Particularly with middle and lower income consumers, they're feeling under a lot of pressure... It's really kind of a two-tier economy. If you're upper income, earning over $100,000, things are good. Stock markets are near all-time highs, you're feeling quite confident about things, you're seeing international travel, all those barometers of upper income consumers are doing quite well.
"What we see with middle and lower income consumers is actually a different story," he added. "It's that consumers are under a lot of pressure in our industry."
Chipotle's Chief Financial Officer Adam Rymer told Reuters: "It does feel like there are certain cohorts of the consumer, definitely on the lower-income side, that are feeling pressure right now."
Moody's Chief Economist Mark Zandi, in a recent interview with Newsweek, said: "If prices rise, consumers grow more cautious. Will businesses respond to that by starting to lay off workers? If they don't, then I think the economy can continue to kind of muddle its way through here, get to the other side of the tariff effects and the immigration effects. But if businesses start to increase layoffs, then that'll set off a kind of self-reinforcing vicious cycle—layoffs, less spending, less spending, more layoffs."
What Happens Next?
In its recent announcement, McDonald's said that customers should expect "more price-pointed Extra Value Meals in the near future."
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