McDonald’s reported on Tuesday that its sales in the U.S. grew 0.8% in its second quarter — which is less than what analysts expected and is about a third of the growth it saw this time a year ago. Also on Tuesday, McDonald’s replaced the leader of its U.S. operations “to help accelerate performance,” according to a company statement. Some of this isn’t McDonald’s’s fault. The broader burger chain industry has been struggling for a while now, according to Rich Shank with the food service research firm Technomic. He gave two reasons: One, beef is old news — chicken’s all the rage. “Chicken chains have been growing very well over the last, you know, several years,” he said. Wingstop and Chick-fil-A are stealing McDonald’s customers. The other industry-wide pain point is that when inflation spiked in 2022, lower-income customers stopped eating out as much, and they still haven’t come back.“McDonald's, certainly being the biggest player in the market, is feeling that, because they do cater to that market pretty well,” Shank said.But then there are the factors that McDonald’s can control. “Some of the marketing initiatives perhaps didn't resonate as well,” said restaurant analyst Sara Senatore with Bank of America.A big ingredient to the success of McDonald’s has been its collaborations with, say, “A Minecraft Movie” or Pokémon, she said. But its Q2 campaigns fell flat.“I think the World Cup was just probably too narrowly appealing,” she said.Another issue: McDonald’s switched up its value menu and took away some of its digital promotions. Then, fewer customers showed up. “If you're not getting traffic growth, that means your existing customers are paying less,” said Jonathan Maze, editor-in-chief of the trade publication Restaurant Business. “And that means your stores are less profitable, and that is a long-term problem.”Then, there’s the service, the drive-thru automation, and ordering kiosks. Human interactions are going down, said Stephen Zagor, who teaches food business at Columbia University. And that matters.“There's no substitute for good food, maybe a smile every once in a while — good service, and at a fair price,” he said.Next quarter might not look great either, thanks to cyclospora scaring fast-food customers away, per Technomic’s Rich Shank. But long-term, he said McDonald’s will be fine. The brand loyalty is too strong not to be.
McDonald's sales soften as diners spend cautiously
McDonald's reported second-quarter U.S. sales growth of just 0.8%, about a third of what it posted a year ago. The fast-food giant also replaced the head of its U.S. operations.










