McDonald's Corp. (NYSE:MCD) is sounding the alarm on weakening U.S. consumer spending, particularly among lower-income customers pressured by the rising costs of necessities. 

• MCD stock is up after earnings. See the real-time price action here. 

Consumers Are Pulling Back Further 

CEO Chris Kempczinski warned restaurant traffic from low-income diners continues to fall at a double-digit pace, a trend that has lasted nearly two years. 

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"We continue to see a bifurcated consumer base with [quick-service restaurant] traffic from lower-income consumers declining nearly double digits in the third quarter, a trend that's persisted for nearly two years," Kempczinski said on McDonald's earnings call. 

The decline highlights how inflation and high living costs are pressuring households with limited disposable income, forcing many to cut back even on relatively inexpensive options such as fast-food meals.

To offset the slowdown, McDonald's has leaned on menu promotions and value offerings. The recent return of Snack Wraps and the reintroduction of Extra Value Meals aim to attract budget-conscious diners. 

McDonald's executives say the promotions have helped boost perception of affordability while maintaining interest across income levels. 

"I think sometimes there's this idea that value only matters to low-income [consumers]," Kempczinski said. "But value matters to everybody, whether you're upper income, middle income, lower income, feeling like you're getting good value for your dollar is important."

Still, the company acknowledged it expects the "highly challenged consumer environment " and pressure on consumers' wallets to continue "well into 2026." 

McDonald's CEO pointed directly to the high costs of housing, childcare and food -- including the present lack of SNAP funding -- as contributing to U.S. consumers' financial strain. 

The Takeaway

McDonald's sees no sign of economic pressures easing and finds itself balancing affordability with profitability as lower-income consumers cut back on spending. 

The company's focus on value-driven offerings may help sustain momentum among cost-conscious diners, but the broader consumer weakness reveals a divide in spending power across the U.S. 

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