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McDonald's Chief Weak Traffic, Sticky Inflation Are New Normal

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CEO Chris Kempczinski says McDonald's expects flat customer traffic and persistent inflation to define the restaurant industry going forward.

McDonald's Chief Executive Chris Kempczinski said on Wednesday that the company no longer views weak customer traffic and stubborn inflation as a passing storm, but as the standard conditions the restaurant industry should plan around. Speaking on CNBC's "Squawk on the Street," he said he has urged his own leadership team to drop the language of hardship entirely.

"One of the things I've talked to our team about is we need to stop talking about that being a difficult environment, and just say that is the environment," Kempczinski said. "Because I think, as we look out forward, we're not expecting things to change." The comments mark a shift in tone for an executive who has spent years describing the market for burgers and fries as a "challenging environment" in his updates to investors and analysts.

The pressure shows up in the company's numbers. McDonald's posted growth of only 0.8% in U.S. same-store sales during its latest quarter, with fewer people visiting its restaurants across the country. Customers are dining out less often and resisting steeper menu prices as their household budgets absorb rising bills for fuel, food and other essentials.

The softness runs well beyond a single chain. Restaurant operators polled by the National Restaurant Association reported falling customer counts in all but one month between August 2025 and July 2026. To pull people back through the doors, McDonald's and competing chains have relied heavily on discounting.

Beef Costs Nearly Double

Guests are not the only ones squeezed by higher prices. Operators, including McDonald's franchisees, have watched the cost of key ingredients climb sharply. Kempczinski said the price of beef has almost doubled over the past five years in the company's largest markets. Spending on wages and on building new locations has also risen, cutting into profit margins.

"Across the board, we're seeing that inflation is sticky," he said. "It's sticky, not just in the U.S., but around the world."

Chasing Rivals' Customers

With the operating backdrop unlikely to ease, the company's strategy centers on winning business away from competitors rather than waiting for demand to recover. "The biggest thing that you need to do in an environment like this is you have to be able to earn share," Kempczinski said. "You have to be able to actually grab growth from your competitors."

He acknowledged that McDonald's may still need to raise prices, but said it would move cautiously to avoid pushing diners toward other options. Kempczinski repeated the company's view that it lifted prices too aggressively in the years following the Covid pandemic, a mistake it does not want to repeat.

Kempczinski and other senior leaders were set to lay out more of the chain's plan to expand its market share at an investor day scheduled for Wednesday.

McDonald's, Chris Kempczinski, restaurant industry inflation, same-store sales, beef prices, fast food traffic, McDonald's investor day, menu price increases

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