Higher gas prices and inflationary pressure from the war in Iran are having a disproportionate impact on low-income customers and it could get worse, fast food giant McDonald’s is warning.
The world’s biggest burger chain posted U.S. same‑store sales growth of 3.9 per cent in the first quarter, missing analyst expectations of a 4.2 per cent increase.
“I think probably it’s fair to say that (the macro-economic environment) it’s certainly not improving, and it may be getting a little bit worse,” McDonald’s CEO Chris Kempczinski said in an earnings call on Thursday.
“We’re measuring success in two ways: our ability to grow share with low-income consumers and our ability to improve value and affordability scores,” he added.
McDonald’s has emphasized value meals in their menu with the aim of growing their share of low-income customers as the cost-of-living worsens.
“You need, in this environment, value and affordability to be a strength,” Kempczinski said.
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“We’ve listened closely to our customers and adjusted along the way with a relentless focus on strengthening our value leadership,” he added.
In mid‑April, McDonald’s expanded its McValue platform in the U.S., adding everyday menu items priced under US$3, such as the US$2.50 McDouble and a US$1.50 Sausage McMuffin, alongside a US$4 breakfast meal deal.
In January, McDonald’s Canada started offering its McValue Meal to Canadian customers for $5 and a small coffee for $1 in a bid to attract low-income customers.
But the fuel crisis and inflationary pressured caused by the war in Iran has had a disproportionate impact on McDonald’s low-income customer base, Borden said.
“Gas prices inflation is going to disproportionately impact low-income consumers. We expect the pressures there are going to continue,” chief financial officer Ian Borden said in the call.
Cost pressures are affecting franchisee cash flow, even where sales remain positive, and are also weighing on margins at U.S. company‑operated restaurants, the company said, adding it would review its franchisee network.
Several U.S. restaurant chains such as Shake Shack, Papa John’s, Wingstop and Domino’s have reported weaker quarterly sales growth, citing fallout from the Iran war.
Lower-income consumers are becoming more selective, Wall Street analysts have said, increasingly trading down to simpler, single‑item orders rather than full meals.
Higher beef prices in the European and North American markets has meant some customers are shifting to chicken, Kempczinski said.
“When beef prices are as elevated as they are, chicken becomes a much more attractive value opportunity relative to beef,” he said.
–with files from Reuters
© 2026 Global News, a division of Corus Entertainment Inc.
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