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McDonald’s Cites Tariffs in Reporting Biggest Sales Slump Since COVID
In a stunning revelation, fast-food giant McDonald’s has reported its largest decline in US sales since the COVID-19 pandemic forced stores to close nationwide. The company attributes this significant drop to heightened economic uncertainty driven by tariffs.
According to CEO Chris Kempczinski, the escalating anxiety about the economy, fueled largely by tariffs, is disproportionately affecting low-income Americans. This, in turn, is causing a decline in same-store sales, which fell 3.6% in the first quarter. This marks a stark contrast to previous records of declining sales during the pandemic.
Kempczinski emphasized that the company’s domestic impact is not immune to the turmoil in the industry or the pressures faced by its consumers. McDonald’s has become one of numerous corporations to publicly declare the negative effects of tariffs on their businesses.
The uncertainty surrounding US trade policy and evolving rates has led many companies to pull back on growth and expansion, as well as delay placing orders for goods manufactured overseas. As a result, consumers are becoming increasingly cautious about making purchases, leading to a decline in consumer confidence.
The data underscores the far-reaching consequences of President Trump’s sweeping tariff agenda. Many experts believe that these tariffs could re-ignite inflation, rendering everyday goods unaffordable and increasing the risk of recession in 2025.
President Trump continues to insist that tariffs will spark investment in US manufacturing and create more jobs domestically. However, this stance is met with skepticism by both consumers and businesses, as evidenced by McDonald’s dismal sales report.
“We remain cautious about the overall health of the consumer,” Kempczinski stated during the earnings call.
In light of these developments, it remains to be seen how the company will adapt to these unprecedented circumstances and what this may mean for the global economy.
Source: https://www.cbsnews.com/news/mcdonalds-tariffs-hurting-sales/
