US, July 31 (V7N/CNN) - In a sign of the times, McDonald’s is facing growing challenges as inflation continues to hit American wallets. For the first time since late 2020, the fast-food giant reported a 0.7% dip in sales at U.S. stores open at least a year, with global sales also slipping by 1%. This downturn reflects a broader trend affecting other major fast-food chains like Starbucks, Burger King, and Wendy’s, all of which are grappling with reduced customer traffic and declining sales.

The decline in McDonald’s fortunes is partly attributed to a tough year-over-year comparison, following a significant sales spike last year driven by the viral success of the Grimace shake. This sugar-loaded purple drink, introduced to celebrate Grimace’s “birthday,” gained notoriety on TikTok, fueling a substantial boost in sales.

However, McDonald’s CEO Chris Kempczinski highlighted a deeper issue: a shift in consumer behavior, especially among lower-income households, who are increasingly sensitive to value. “We’ve been seeing a more discerning consumer, particularly from lower income brackets,” Kempczinski remarked. In response, McDonald’s has launched a series of value-focused initiatives, including a popular $5 meal deal, which has begun to show promising results. Despite this, the company acknowledges that closing the value gap remains a significant challenge.

McDonald’s is also adjusting its strategy to meet evolving consumer preferences. The company is focusing on expanding its chicken offerings, which now rival beef sales, and is testing new products like the Big Arch burger—featuring two patties, cheese, a crispy topping, and tangy sauce.

Kempczinski remains optimistic about the company’s resilience. “The hallmark of a great company is its ability to perform well in both good and challenging times,” he stated. “We are committed to reigniting growth in all our major markets, though this will take time.”

The rising cost of dining out has become a significant factor in consumers’ choices, with food away from home becoming a luxury for many. McDonald’s has faced backlash over price increases, including a viral post last year showcasing an exorbitantly priced Big Mac meal, which, while isolated to a single Connecticut location, fueled perceptions of corporate greed. McDonald’s has since apologized and urged franchisees to adhere to pricing guidelines.

As McDonald’s navigates these challenges, the company’s stock has seen a slight uptick, rising over 3% on Monday. However, it has still fallen 12% year-to-date, underperforming compared to the broader market rally. McDonald’s continues to seek ways to balance rising costs with customer expectations for greater value.

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