Earnings from the first three months of 2026 show food businesses leaning on value menus and price cuts are gaining share as mid-tier brands are losing, with executives warning they expect low-income consumers to pull back even more as rising gas prices and inflationary pressure from the Iran War heighten anxiety about spending.
A McDonald's Big Mac Combo Meal is shown. (AP Photo/Paul Sancya)
Copyright 2025 The Associated Press. All rights reserved
Reporting U.S. same-store sales growth of 3.9% in the first quarter—which the company attributed to its Extra Value Meals and McValue menus—McDonald's CEO Chris Kempczinski warned Thursday that elevated gas prices will disproportionately impact low-income consumers and fast food visits from households earning $45,000 or less are continuing to decline.
Restaurant Brands International reported Wednesday Burger King US same-store sales growth of 5.8% in the first quarter, roughly double analyst expectations of about 3%, driven by value items including the $3.99 King Junior Meal, while Popeyes same-store sales declined 6.5% in the quarter.
Last week, Yum Brands reported Taco Bell same-store sales growth of 8% in the first quarter largely due to its Luxe Value Menu, while its other portfolio brands KFC and Pizza Hut lagged behind as CEO Chris Turner said the company is planning on adopting Taco Bell’s value playbook across its other brands to capture customers again.
Last week, Wingstop reported domestic same-store sales down 8.7% year-over-year, with management citing rising fuel prices that "stressed the balance sheet of the lower-income consumer that our business overindexes to."
In April, PepsiCo reported first-quarter net revenue growth of 8.5%, after the company cut prices on Lay's, Tostitos, Doritos and Cheetos by as much as 15% in February to win back cost-conscious shoppers.
Wendy's reported Friday same-store sales fell 7.8% year-over-year, with chief accounting officer Suzie Thuerk adding that the company is “performing better with the higher income consumer than the lower income consumer” as they expect continued pressure on low-income consumers.
“They’re literally running out of money at the end of the month,” Kraft Heinz’s new CEO Steve Cahillane told Bloomberg. “We’re seeing negative cash flows in the lower-income brackets where they’re dipping into savings.” In an interview with the Wall Street Journal, Cahillane added that while the food and beverage industry has been battling to be as affordable as possible, consumers haven’t been able to handle even that.
The pattern unfolding across fast food earnings is the clearest evidence yet of a bifurcated consumer that economists and CEOs have dubbed the “K-shaped economy”–where higher-income households’ gains widen while lower-income households’ losses widen, like the two diverging strokes of the letter K. The logic goes that higher-income households earning more than $125,000 a year, buoyed by stock market gains, home equity and stable white-collar jobs keep spending, while lower and middle-income households, squeezed by years of cumulative inflation on essentials like rent, groceries and insurance, continue to pull back as the financial burdens mount. The term gained traction in 2023, when the wealthy bounced back almost immediately after the pandemic while service workers and renters struggled once pandemic stimulus checks dried up. In practice, the K-shaped economy indicates national averages such as GDP growth, consumer spending and the unemployment rate can look healthy driven by the top spenders even as a large slice of the country feels like it's in a recession. The top 10% of earners account for nearly half of all U.S. consumer spending, according to Moody’s Analytics.
Consumer sentiment hit another all-time low Friday, dropping to 48.2 in May from a previous record low of 49.8 in April, with one-third of respondents citing gas prices due to the Iran War and 30% mentioning President Donald Trump’s tariffs, according to the University of Michigan consumer sentiment index. Facing economic pressure, consumers are taking on debt to make ends meet: Car loans in the U.S. were at a record $1.68 trillion at the end of 2025, surging 23.5% from 2020. Average credit card balance per consumer stands at $6,519, up 2.3% year over year, with a larger share of borrowers becoming either superprime with a credit score of 780 or higher, or subprime, with a credit score below 600, according to a TransUnion report released April 30.
此内容由惯性聚合(RSS阅读器)自动聚合整理，仅供阅读参考。 原文来自 — 版权归原作者所有。