McDonald’s is experiencing a rare global decline in sales as price-sensitive customers are reducing their spending at the fast food giant. In Australia, the chain is facing competition from new rivals, with consumers choosing alternative options like burritos or charcoal chicken packs over traditional burgers and fries. This change in buying habits is raising concerns about whether McDonald’s can still offer a convenient, well-priced meal after a series of menu price increases. The question is whether the burger chain has become too expensive in the midst of a cost-of-living crisis.
McDonald’s has reported its steepest quarterly drop in US sales since early in the pandemic, with a 3.6% decline in same-store sales and a decline in global sales. High living costs are affecting not only lower-income consumers but also middle-income consumers, which is a worrying sign for a business reliant on the mass market.
According to Shaun Weick, the deputy portfolio manager at Sydney-based Wilson Asset Management, the rise of competitors, including Mexican-themed Guzman y Gomez, is enticing customers away from McDonald’s. Research from Fonto shows that McDonald’s consistently underperforms on customer satisfaction compared to other brands, particularly when it comes to price.
Despite this, McDonald’s still values convenience, with over 1,050 locations across Australia. Customers still appreciate the convenience factor, and the chain is relying on its “loose change menu” to bring customers back during the cost-of-living crisis. However, it remains to be seen whether this will be enough to regain market share and competitiveness.
Source: https://www.theguardian.com/australia-news/2025/may/17/not-lovin-it-australians-enticed-by-premium-rivals-as-mcdonalds-records-rare-fall-in-sales
