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

McDonald’s, a stalwart American fast food chain, posted a steep sales drop at U.S. restaurants in its first quarter earnings report Thursday, citing economic uncertainty and diminished consumer sentiment.

“Heightened anxiety” about the economy, driven largely by tariffs, is weighing on lower-income Americans, McDonald’s CEO Chris Kempczinski said on the call. 

The burger chain’s same-store sales in the U.S. declined 3.6% in the first quarter, reflecting economic pressures weighing on low- and middle-income consumers in particular, McDonald’s said on its earnings call. That marks the biggest U.S. decline for the company since the COVID-19 pandemic forced stores to close nationwide.

Kempczinski added that traffic to U.S. restaurants fell more sharply than the company had anticipated, and that “we’re not immune to the volatility in the industry or the pressures that our consumers are facing.”

President Trump’s sweeping tariff agenda has stoked widespread uncertainty among businesses and consumers alike. Many companies are pulling back on growth and expansion, and delaying placing orders for goods manufactured overseas, as a result of the uncertainty caused by evolving rates, and the on-again, off-again status of U.S. trade policy.  

Consumers are also hunkering down and delaying some purchases as their confidence in the health of the economy plunges. Shoppers are concerned that tariffs could re-ignite inflation, and make everyday goods unaffordable, while economists are raising the odds of the U.S. economy entering a recession in 2025. 

Mr. Trump, however, insists that tariffs don’t hurt Americans, and will instead spark investment in U.S. manufacturing, and create more jobs on U.S. soil. 

But consumers and businesses say otherwise, with McDonald’s being on among numerous corporations saying they’re taking a hit. “We remain cautious about the overall health of the consumer,” Kempczinski added.