Appetite dwindles for fast-food giant

By the Editorial Team · Wednesday, September 23, 2026

McDonald’s has seen its share price drop nearly 20 percent this year amid slowing sales growth, rising costs, and changing consumer trends, with comparable sales growth in the US falling to 0.8 percent in Q2. Despite improved profit margins driven by price increases, the company faces challenges from franchisee cost pressures, demographic shifts, and increased competition, leading to a delayed expansion target and an uncertain outlook.

McDonald’s, the world’s largest fast-food chain by revenue, is facing a challenging environment as growth slows and consumer preferences evolve. The company’s share price has declined nearly 20 percent this year amid concerns over reduced sales momentum and rising operational costs ahead of a key investor day on September 23.

Price increases have contributed to improved profit margins even as revenue has remained relatively flat. Over the past decade, the cost of a Big Mac has nearly doubled in the UK, rising from approximately £2.89 to £5.49. This pricing strategy has boosted McDonald’s operating profit margin from about 29 percent a decade ago to 46.1 percent by the end of last year. Despite a modest rise in revenue from $25 billion to roughly $27 billion, post-tax profit nearly doubled, reaching $8.6 billion in the most recent fiscal year.

In the UK, McDonald’s operates nearly 1,500 sites, with approximately 90 percent owned by franchisees. Each franchisee is responsible for paying rent, a service charge of 4 to 5 percent of sales, and additional fees for marketing and other services. However, franchisees are grappling with upward pressure on costs. Wages have risen amid national living wage increases targeting younger employees—who comprise around 100,000 of McDonald’s 156,000 UK workforce—while food and energy price inflation, as well as higher fuel costs, have further squeezed margins. The company has also recently lost its position as the largest fast-food chain in the UK to Newcastle-based Greggs.

In the United States, which accounts for about 40 percent of McDonald’s global sales, comparable sales growth slowed to 0.8 percent in the second quarter from 2.5 percent during the same period last year. The firm has delayed its goal of reaching 50,000 restaurants worldwide from the end of 2027 to the end of 2028. Demographic shifts, including a declining birth rate, an aging population, and reduced immigration, are shrinking the core young consumer base. Additionally, the rising popularity of weight-loss medications is expected to further affect demand.

The company is also contending with internal challenges, including allegations of sexual harassment, racism, and bullying at some of its locations. Leadership recently saw the appointment of Skye Anderson as president of the US business in early August, while Chris Kempczinski continues to serve as chief executive and chairman.

Despite its struggles, McDonald’s marked a milestone this year by maintaining 50 consecutive years of dividend increases, joining an exclusive group of about 60 “dividend kings.” The current annual dividend stands at $7.32 per share, yielding roughly 3 percent. However, analysts suggest that the stock’s valuation at around 19 times earnings, below its historical average of about 23 times, may still be difficult to justify given the company’s growth challenges and the broader market’s strong performance driven by sectors such as artificial intelligence.

McDonald’s has successfully improved profitability through pricing power and cost management, but sustaining growth amid changing consumer preferences and rising costs presents a significant hurdle. The outlook remains uncertain as the company balances franchisee pressures, demographic trends, and competitive pressures in a rapidly evolving fast-food landscape.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.