McDonald’s stock has fallen about 31% from its February peak, while the company expects US sales to be “slightly negative” in the current quarter amid pressure from higher prices, weak sales and competition in the fast-food market.
Higher prices weaken McDonald’s appeal
McDonald’s sales growth was no more than 0.8% in the previous quarter, the slowest pace in more than a year, as consumers increasingly complained about higher prices and declining value for money.
Jackob Aiken-Phillips, an analyst at Melius Research, said McDonald’s prices had risen substantially and that the chain was no longer considered one of the best-value options.
Data from The Economist’s Big Mac Index show that the price of the burger in the United States rose by about 23% between 2019 and the end of 2025. McDonald’s began raising menu prices after the COVID-19 pandemic to offset higher meat, wage and fuel costs, as consumers were also facing pressure from inflation and higher interest rates.
Rivals post stronger growth
Burger King posted 8.5% growth in comparable US sales in the latest quarter, while Taco Bell’s same-store sales rose 7%, compared with limited growth at McDonald’s.
McDonald’s stock fell 23% from the start of the year through September 25, compared with a 13% rise in the S&P 500 index of US stocks.
Discounts and spending plan weigh on profits
Some McDonald’s franchisees opposed discount programs, which could boost sales but narrow the profit margins of operators facing high costs. Chief Executive Chris Kempczinski said about one-third of franchisees had not complied with pricing guidance, while about 95% of the company’s restaurants operate under the franchise model.
McDonald’s announced a multiyear plan worth $8.5 billion to improve food and service quality, along with its “Next” initiative, which includes investment in technology, restaurant upgrades and expansion in chicken and beverages. The plan raised concerns about eroding profits, and its announcement was followed by a fresh wave of selling in the stock.
An analyst at Seaport Global said the changes could take at least a year to produce tangible results, while the company faces simultaneous near-term pressure from weak sales and higher capital spending.
