McDonald’s says tariffs are hurting sales after reporting largest decline since pandemic

McDonald’s, a longstanding American fast-food chain, faced a significant sales decline at its U.S. restaurants in the first quarter earnings report released on Thursday. The company attributed this drop to economic uncertainty and diminished consumer sentiment.

CEO Chris Kempczinski highlighted that heightened anxiety surrounding the economy, primarily driven by tariffs, is impacting lower-income Americans. The burger chain reported a 3.6% decrease in same-store sales in the U.S. during the first quarter, reflecting the economic pressures faced by low- and middle-income consumers. This decline represents the largest drop in U.S. sales for McDonald’s since the onset of the COVID-19 pandemic.

Kempczinski noted that foot traffic to U.S. restaurants declined more sharply than anticipated, emphasizing that McDonald’s is not immune to the industry’s volatility or the challenges faced by consumers.

President Trump’s tariff agenda has contributed to widespread uncertainty among businesses and consumers. Companies are scaling back on growth and expansion and delaying orders for goods manufactured overseas due to evolving tariff rates and the fluctuating status of U.S. trade policy.

Consumers are also exercising caution and postponing certain purchases as confidence in the economy wanes. There are concerns that tariffs could lead to inflation and increase the cost of everyday goods. Economists are even raising the possibility of the U.S. economy entering a recession in 2025.

Despite President Trump’s assurances that tariffs do not harm Americans and will promote investment in U.S. manufacturing, many consumers and businesses disagree. McDonald’s, among other corporations, has experienced negative impacts from the current economic climate. Kempczinski expressed caution about the overall health of the consumer market.

As the company navigates these challenges, it remains to be seen how McDonald’s will adapt its strategies to address the shifting economic landscape and consumer behavior.

Megan Cerullo, a reporter for CBS MoneyWatch, covers various topics including small businesses, workplace dynamics, healthcare, consumer spending, and personal finance. She frequently shares her insights on CBS News 24/7.