The polarization of U.S. consumer spending is showing clearly even inside McDonald's, the fast-food chain that represents the United States. As inflation and the burden of living costs have eroded the purchasing power of low-income households, high-income households with rising demand for dining out are driving McDonald's sales. While McDonald's has logged sales growth on the back of higher spending by affluent consumers, it has launched an all-out push to win back low-income customers lost to price increases.
On the 5th (local time), according to the Washington Post, McDonald's Chief Executive Officer Chris Kempczinski said in the third-quarter earnings release, "Low-income customer traffic has declined by nearly double digits across the industry," and noted, "With living costs such as groceries, clothing, rent and child care rising rapidly, pressure on low-income households has grown." Kempczinski added, "The inflation that low-income consumers have to shoulder is considerable, and it is damping both their spending behavior and consumer sentiment."
Even so, sales themselves rose. McDonald's said, "U.S. sales on a same-store basis increased 2.4% from a year earlier." Sales at McDonald's restaurants worldwide also climbed 3.6% in the same period. Total sales reached $36 billion, up 8% on-year, and on the day of the earnings release, the share price closed at $305.67, up 2.2% from the previous day. Kempczinski said, "Visits by high-income customers showed double-digit growth," adding, "By contrast, the decline among low-income customers is a common trend not only for the company but across the industry."
This trend is one facet of the polarization of consumption in the United States. Experts say that while middle- and low-income households are cutting back on dining out and nonessential spending due to price pressures, high-income households still have strong expenditure capacity. Scott Boatwright, CEO of the restaurant chain Chipotle, said, "Visit frequency among customers with household income under $100,000 has noticeably decreased," adding, "The consumption gap between customers is widening further."
Low-price retailers such as Walmart, Dollar General and Dollar Tree have also pointed to a similar trend. They warned, "Low-income shoppers, our core customer base, are sharply reducing discretionary spending," while noting, "Inflows of affluent customers seeking discounted products are actually increasing."
McDonald's has struggled to retain low-income customers after price increases in recent years. According to company data, the average menu price rose 40% from 2019 to 2024. The company says price hikes were unavoidable as wage increases and higher costs for ingredients and packaging combined, but consumers' perceived inflation burden has grown since the COVID-19 pandemic. In fact, in the first quarter of this year, visits by low-income and middle-class customers fell 10%, marking the biggest drop since the pandemic.
Kempczinski said, "It is not easy to strike a balance between securing revenue through price increases and retaining customers," adding, "The entire industry is grappling with the same challenge."
In response, McDonald's has moved to strengthen its "value menu" to draw back price-sensitive consumers. Last month, it revived the "Monopoly game" promotion for the first time in 10 years, launched $5 and $8 set menus, and reintroduced the $2.99 "Snack Wrap." While this low-price strategy can boost sales in the short term, its sustainability is uncertain given the heavy cost burden.
In the fast-food industry, competition has intensified as even sit-down restaurant chains such as Chili's target price-sensitive consumers. Mark Kalinowski, senior analyst at the U.S. consulting firm Technomic, said, "If McDonald's fails to win back low-income customers, its growth could slow," analyzing that "the polarization of the U.S. dining-out market is becoming a decisive factor reshaping overall brand strategy."