McDonald’s CEO is struggling with a “two -level economy” while reducing the prices of value meals

For years, dating back to the 2022 inflation wave, McDonald’s and its fast food rivals supported the frustration of buyers in the face of the prices of the menu rise, with combined meals repercussions in two figures. Customers of the upper end of the income spectrum continue to order premium products and use delivery applications at healthy prices. The low -income guests, however, reduce, has argued Kempczinski in an interview on the “Squawk box” of CNBC, less fast catering as daily convenience and more like occasional madness. He told anchors that McDonald’s had made a “value trip” in the past year.

“In particular with consumers with average and low -income income, they feel in great pressure at the moment,” Kempczinski told CNBC Anchors. “There are a lot of comments around:” What is the state of the economy, how are you right now? “And what we see is that it is really a kind of economy on two levels. He cited traffic for these demographic data down two figures and they jump breakfast or eat at home.

Kempczinski has been insisted on certain political questions from the CNBC anchors, especially if McDonald’s adapts with the Maha of the HHS secretary, Robert F. Kennedy, or “rendering America again in good health” and the policy concerning no tax on advice. Kempczinski said he personally supported the issue of non-taxes on tips, but said it hadn’t helped McDonald’s a lot, because it does not allow advice. A TIPS restaurant requires a minimum wage of only $ 2.13 an hour, he added, which has not been changed since 1991, calling for this “unequal playing field” because “you essentially get the customer to pay for your work”, as well as the free tax advantage. He called for a federal minimum wage for all kinds of restaurants, then said that McDonald’s was “open” to raise the federal minimum wage beyond, adding that the company was “in dialogue” with the White House about several questions, including it.

The current federal minimum wage in the United States is $ 7.25 per hour, an unchanged rate since July 24, 2009. This long-standing rate brand over 16 years without federal increase, making it the longest period in American history without updating the minimum wage. However, many states and localities have adopted higher minimum wage rates, some reaching up to $ 18 an hour in the Columbia district.

In 2025, new significant legislation called increased increase in the 2025 salaries was introduced to the congress. This proposed law would gradually increase the federal minimum wage to $ 17 an hour by 2030, eliminating SubMinum’s salary rates for tilting workers, disabled workers and young people. In addition, a Senate bill was proposed to increase the minimum wage to $ 15 an hour from January 1 of the first year after its adoption. These legislative efforts indicate an active momentum at the federal level to increase the minimum wage after more than a decade of stagnation.

Different from the great recession

Kempczinski added that it was not like what McDonald’s saw during the great recession, “when everyone exchanged.” And so McDonald’s must be creative to play both sides of the problem. Increased accessibility for low -income consumers is now in the form of a renovated meal pack of $ 5, as well as more aggressive price promotions on the flagship markets. Advertising campaigns are based strongly on the theme of value, a message designed to resonate with families aware of the obligatory costs to make sharper compromises in their daily expenses.

The strategy highlights an act of balancing for McDonald’s. As one of the rare world channels with size and supply power to reduce prices without immediately paralyzing profitability, the company can play the offensive where small rivals cannot. However, franchisees – which exploit most of the American locations – are wary that the thinner prices could turn into margin, portions, salary, rent and insurance remain high. However, Kempczinski told CNBC anchors that the passage to more value was “almost unanimous” among the franchisees, towards a surprise reaction.

The wider retail image

The double -track strategy of McDonald’s echoes a broader split in a large part of the American economy. Large -area retailers like Walmart and Target report a similar trend that the CEO General of Dollar, Todd Vasos, put their finger in March: “Many of our customers report that have only enough money for basic essentials.” Delta Air Lines, an indirect indicator of demand from the wealthy consumer cohort, is largely ranging from force as the most profitable airline in America, although it has reduced advice during 2025, due to the uncertainty of the Trump tariff.

Trends recall an economic scheme established during the pandemic: the economy “in K”. Like Gregory Daco, chief economist in Ey-Parthenon, explained to Fortune In 2023, this means that consumers with average and low -income income are one leg of the “K”, pointing downwards and to the right, while the higher income cohort is better and better.

McDonald’s, however, must master the “K” to make the most of its consumers. This means fighting to maintain your position of several decades as a place of choice for an affordable meal, even if it courts upper margin opportunities to be satisfied with satisfied shareholders. The question of whether this balancing law turns out to be sustainable can depend on the duration of the consumption economy with two American tracks.

For this story, Fortune Used a generative AI to help an initial project. An editor checked the accuracy of the information before the publication.

Global Forum fortune returns on October 26 to 27, 2025 in Riyadh. CEOs and world leaders will meet for a dynamic event only invitation that shapes the future of business. Request an invitation.