McDonald’s is going through its worst same-store sales decline ever in the U.S. The change comes as the fast-food and hamburger giant prepares to announce its first-quarter earnings later this week. CFO Ian Borden has indicated that the first quarter of the year is anticipated to be the low point for these sales figures. For one, there are significant economic headwinds in the form of trade wars and anti-consumer sentiment. They have helped create a hard landing for the company so far in 2023.
Indeed, fears of a recession, in part worsened by President Donald Trump’s tariffs, have taken a big toll on consumer confidence. This drop in optimism is sure to take an additional bite out of McDonald’s top-line sales as increasingly frugal customers will continue to pull back on spending. Analysts predict that the company will experience its second consecutive quarter of declining same-store sales, reflecting the ongoing challenges in the current economic landscape.
Economic motivations are not the sole forces in effect. The effects from an E. coli outbreak in October have deeply colored consumer impressions of the brand and battered sales. The recent health scare has created a strong climate of concern around food safety, driving customer hesitancy. In turn, demand for McDonald’s offerings have suffered, in keeping with a wider trend of consumers being more cautious with their spending.
While McDonald’s is trying to prepare for the launch of its first-quarter earnings report this Thursday, May 2, analysts will be glued to those numbers. The firm had previously provided the lowdown by pre-announcing that same-store sales would probably be negative for the quarter. That spells bad news for the long-term financial picture.