McDonald’s is expanding its value meal menu. Reason suggests increasing problems in the economy, analysts say.
In an interview on Tuesday in CNBC, the CEO of McDonald’s, Chris Kempczinski, said the measure was in response to the growing evidence of a landscape of the divided consumers: while high -income households continue to spend freely, the rest is fighting.
“Particularly, with average and low income consumers, they feel under a lot of pressure at this time,” Kempczinski said. He added: “It is really a kind of two -level economy.”
The idea that the economy is forking is not new, but the trend seems to be more pronounced. It began to bubble more recently, since the COVID-19 pandemic showed signs of decrease and the actions began to increase. Government’s pandemic assistance helped to level the field for a while, but by 2024, the growing pressure of inflation and high interest rates had begun to laugh consumers according to their ability to resist financial stress.
At the beginning of 2025, the richest 10% of the Americans, or those who earned at least $ 250,000 a year, represented half of all costs of consumers, a record, according to Moody’s Analytics. In comparison, the richest 10% represented 36% of all consumer expenses 30 years ago.
That is a trend prepared to continue. Employment growth shows signs of stagnation, while cost pressures in companies and consumers are increasing due to tariffs. Low -income consumers now have substantially higher levels of credit card debt than in 2019, according to a new study by the Boston Federal Reserve. Low income workers have increased withdrawals of difficulties from their retirement plans 401 (K), said Vanguard Financial Services to NBC News, since the hiring of growth for workers per hour has collapsed.
However, the actions continue to stir mainly. The result: well -off consumers are advancing in a broader economic uncertainty, while the prospects for all others increasingly stagnant.
“It really is a story of two different homes,” said Mark Zandi, chief economist of Moody’s Analytics.
Kempczinski said McDonald’s has found a growing number of customers who jump foods such as breakfast or choose to eat at home. Traffic for some low -income cohorts has dropped “two digits,” he said.
“For our business, which has an important group of consumers who are in that average and lower income, we need to intervene,” Kempczinki said.
Other Chipotle consumption brands to Kohl are echoing Kempczinski’s feelings about a divided consumption perspective.
“There are certain consumer cohorts, definitely on the side of low income, which are feeling pressure at this time,” Chipotle, Adam Rymer, told Reuters. “That is something that we will have to take into account when looking at the price in the future.”
Companies that depend on consumers waste, think of Amazon, Nike, Royal Caribbeans and Starbucks, have had significantly lower performance than the rest of the market this year, according to S&P data Global Financial Services Group. Meanwhile, the returns from the stock market to groups of luxury items such as jewelry chains and high -end fashion firms have raised.
UBS Financial Group analysts said in a note on Monday that it is likely that McDonald’s announcement pushes other restaurant brands to push value offers more. The gastronomic groups, they said, are now operating “in a difficult macro environment in which consumers manage visits” as a result of inflation and the reduction of spending energy.
On Friday, Wall Street will analyze the government job report for August to obtain more pressure signs on US consumers. The governor of the Fed Christopher Waller, seen as an ally of President Donald Trump when asking for lower rates, warned last week that the report is likely to show that the hiring remains slow. Analysts await 75,000 new aggregate net jobs, essentially unchanged since July.
If the weakness in the labor market persists, the financial stress among the average and low income consumers could eventually “drip” the highest income, said the chief economist of the morning, John Read.
“Many companies are realizing that, at least at the end of this year, the accommodations are the future of consumer panorama,” he said. “My concern is that there are only many of these consumers.”
