In my kitchen hangs a picture of a bicycle with a simple but powerful message: “Life is like riding a bike. To stay balanced, you must keep moving.” It’s a reminder of persistence, though in moments like these, many are left questioning whether it’s possible to balance everything. Rising costs and financial strain have forced households to cut back and shift daily habits.
Everyone is coping differently. Recently, McDonald’s (MCD) CEO Chris Kempczinski dug into sales data to better understand what customers are experiencing in today’s economy. What he found was a sharp divide between consumer groups, with not everyone feeling the pinch in the same way. According to him, lower- and middle-income customers are “under a lot of pressure in our industry.”
To address the loss of those struggling customers, McDonald’s has rolled out a new initiative. In a September 3 interview with CNBC, Kempczinski revealed that traffic among lower-income consumers was “down double digits.” He added, “And it’s because people are either choosing to skip a meal — so we’re seeing breakfast, people are actually skipping breakfast — or they’re choosing to just eat at home.”
Speaking on CNBC’s Squawk Box, Kempczinski explained the divide further: “It’s really kind of a two-tier economy. If you’re upper-income, earning over $100,000, things are good. Stock markets are near all-time highs, you’re feeling quite confident about things, you’re seeing international travel, all those barometers of upper-income consumers are doing quite well.” In contrast, he noted, conditions remain much tougher for middle- and lower-income Americans.
The broader economic data backs this up. The all-items Consumer Price Index (CPI), a standard measure of inflation, rose 0.2% between June and July 2025, and 2.7% over the prior 12 months, according to the U.S. Department of Agriculture. But food prices told a sharper story. In July 2025, food costs were 2.9% higher than the year before. At-home groceries rose 2.2%, while restaurant and fast-food dining jumped 3.9% — making eating out significantly more expensive.
That shift has created ripple effects across the restaurant industry. Chains large and small have struggled to keep customers coming in while facing higher labor costs, inflation, and fierce competition. Many well-known names, including Red Lobster, TGI Fridays, Bertucci’s, Bar Louie, and Fernando’s Mexican Cuisine, have either shut locations or filed for bankruptcy.
Meanwhile, consumers themselves are feeling the weight of higher living expenses. A poll by the Associated Press-NORC Center for Public Affairs Research found that 53% of Americans now see food costs as a major source of stress. Another 33% said grocery spending was at least a minor stress. For essentials like beef, prices have surged dramatically — rising 12% between June 2024 and June 2025, to an average of $6.12 per pound. KC Cattle Company CEO Patrick Montgomery told Axios those numbers are “just the tip of the iceberg. Prices for beef will continue to be tumultuous for the next two to four years.”
McDonald’s is far from alone in responding to the challenge. Competitors like Wendy’s are also adjusting their approach to appeal to price-sensitive customers. Analysts agree with the assessment. “The low-income consumer remains under pressure,” Bank of America Research Analyst Sara Senatore told CBS MoneyWatch.
McDonald’s answer has been to introduce new value-focused options. Prices at the chain have climbed nearly 40% in recent years, sparking criticism, though the company has attributed the increases to rising food costs. Beginning September 8, the fast-food giant is launching a lineup of Extra Value Meals. These include a $5 Sausage McMuffin with Egg meal — with Hash Browns and coffee — and an $8 Big Mac meal paired with fries and a drink. Across the menu, customers can save about 15% compared to buying the items individually.
“From the $5 Meal Deal to McValue and now Extra Value Meals, we’re sending a clear message: We’re here for our customers. McDonald’s will always be a place where you can get the food you love at a price that fits your life,” McDonald’s USA President Joe Erlinger said in the announcement.
