For decades, McDonald’s was the most popular fast food chain in America, a place where families and children could enjoy a meal at affordable prices. But those days are long gone. Now, the soaring cost of several menu items is making the company lose millions of customers and billions in sales every year, resulting in worrying cash flow problems that are accelerating its collapse in the very industry it helped to create. In this video, we explore some of the reasons why the world’s largest burger flipper is losing momentum and falling apart in the US market as the brand continues to lose its essence.
May was yet another month where a wave of customer defections hit several McDonald’s restaurants across the US. In nine of the past 10 months, the burger flipper reported losing customers in the United States, and a new analysis reveals that has everything to do with its new pricing strategy.
In April, McDonald’s announced price increases on a number of menu items for the second time in a single quarter. The company noted the decision came amid rising commodity prices and labor costs. The last price hike was seen on February 15, when it raised the cost of five combos by a dollar. But indicators show that consumers are getting fed up with higher costs at McDonald’s restaurants. In the first quarter of 2023, the company reported an average price increase of about 10% in its US locations when compared to the same period of the prior year.
Although executives said that higher menu prices are helping the company to boost earnings and revenue, analysts argue this is also shrinking the chain’s customer base, which will ultimately hurt its bottom line.
Even though same-store sales have risen over the past decade, higher average checks drove these numbers, not customer visits. “How many millions of lost customers will it take before McDonald’s really focuses on reversing this risky trend?” asks Forbes contributor, Larry Light.
He predicts that for the company to increase revenues relying on average checks on a shrinking customer base will require the average customer to spend $20 per transaction. This troubling pricing strategy is accelerating the brand’s downfall. During a call with investors, the CFO highlighted that McDonald’s cannot survive with declining customer counts. Corporate knows that it’s impossible to maintain a chain that operated 38,000 stores across the globe on a shrinking customer base. Still, nothing has been done to prevent this from happening.
Considering its enormous operations worldwide and the conditions that led the company to become a huge success, it is very odd to see that instead of investing in keeping and growing its base of customers who can afford to regularly frequent its restaurants, the brand is focusing on gaining a public that already has hundreds of options of higher priced burger chains out there.
In an industry that is getting more and more competitive with each passing year, being one of the largest and oldest chains in the market is not a synonym for success and growth anymore. Businesses have to adapt constantly and, more importantly, value the customers that they already have. The fall of McDonald’s is a self-inflicted crisis that will spark major repercussions for the company in the near future. And that means America’s most iconic fast-food chain is at serious risk of collapsing all around us, and its downfall will be very painful to watch.
Article and video via Epic Economist.
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Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
Headline grammar!!!!!!!!!!
The peopleless ordering system, horrible WiFi, no peanuts, perpetual broken ice cream machines, no more self-service drinks… There’s plenty of reasons in addition to the high prices that I no longer go to McDonald’s.
McDonald’s is still by far the cheapest compared to other fast food restaurants. McDonald’s parking lots are still filled with more cars than many other restaurants. Sorry, but the sandwiches at these other places are ridiculously crazy expensive. So what? McDonald’s can’t raise their prices? Only other places can? Ground beef is outrageous in the grocery stores! Everything is! Is that McDonald’s fault too? Look to DC for that answer.
Dude you love McDonalds… I’ve never seen such a strong defense of literal Garbage..
I really hope that Big Mac you’ll be getting later is tasty..
How about the fact that the food is incredibly processed, terrible for human consumption and fake. There is literally no comparison to what a McDonald’s hamburger tasted like 30 years ago. The entire menu is fake food.
But I digress. All fast food is pretty much the same.
The only thing that gets sacrificed in the fast food biz is food quality. Hence the reason we buy beef by the half or full side and grill out on either our blackstone or Traeger daily during the summer. Haven’t had need or desire for garbage food for years.
In-n-Out Burger is an exception to the fake food rule. Even their fries are cut fresh by hand.
McDonald’s used to be tasty garbage fast & cheap – now it’s just garbage. That’s why I don’t go.
I quit going to McDonalds a long time ago. Although their closest restaurant is just upmthe street, I would rather drive 20 minutes to my local Whataburger. Why? Because it is cheaper and the food tastes better. It’s that simple.
Don’t look at me! I’m a Wendy’s guy!
McDonald’s is really a real estate company charging rent to franchisees. I like the egg McMuffin and occasional Big Mac though. I think the cost of the infrastructure and real estate taxes are what’s hurting the chain — not the food itself. The food is fine, you get what you want if the workers do it right. That’s the other problem, unreliable workers. I feel sad for the franchisees who loved the food and the culture, but the unreliable workers and costs just killed it for them 😢😢😢
This article could use a few more solid examples to make a better case for its assertion. How much does McDonalds gross on its higher priced meals versus its budget meals? Seems the overhead would be about the same per meal, so the equation would boil down to how many budget meals must it sell to match the gross of one high priced meal? And is there enough demand for the budget meals to warrant a reduction in the price of the high priced meals? Has McDonalds dropped the budget items altogether so customers can only get the higher priced items? I suspect any revenue issues McDonalds is experiencing has more to do with staffing and wait times than prices. It was fast food when you could walk up to the window, place your order from a very limited menu, and walk away with your order in less than two minutes. Now it takes longer than that to read the menu and often you’re waiting several minutes to receive it. Maybe they need to streamline the menu and get back to basics. Waiting for fast food is an oxymoron.
Stores have even curtailed their hours . I generally am on the kob at 5am . You can rarely now find a 24hr mickey D . Am in the capital of my state and nothing is open until 8am – thats ridiculous !. And then the cost as som McD’s are $7 and others are $10 for the same breakfast meal wtf ?.
Ten percent is a modest increase given the government driven inflation. Poor service would be a bigger driver of lost customers. A friend and I stopped at a Greenville, NC Mickey D’s at 6:30AM for coffee to go on our way to a race in 2013. The coffee was rancid, tossed it. Haven’t been in a Mickey D’s since
Too much salt, the burgers don’t taste like beef, the fries don’t taste like potatoes, it all tastes like salt.
Gee Walley…do you think the meat that has the taste and texture of cardboard (where’s the beef?) or the dirty-looking, tattooed up people that serve you (which makes you doubt sanitation) could be a factor in McDonald’s demise? Chik-Fil-A is still doing OK and their food isn’t soybean laden, their facility and staff don’t look like the dregs of society, and their food costs more. However, in truth, CFA is also going downhill since the father died. And they are going to get hammered, too, if the useless son doesn’t shut his mouth…his woke talk has ticked off many customers…some I know personally who are already quietly boycotting CFA because they see the downward trend of shirtsleeves to shirtsleeves in one incompetent generation. Go woke, go broke….buddy. CFA is not immune.
McDonalds has the same problem most big companies have, they are only in business for $$$, not to provide a valuable service or product.
When ‘profit’ is more important than the service you provide, the public will take notice and vote with their feet.
Couldn’t disagree more with your conclusion and your initial proposition that all McDonald’s problems are pricing related. They are not. Is In and Out struggling? Do you think people that go to In and Out will stop going if prices for a combo go up by a buck? If not, why? Quality. McDonald’s has none. In fact there is so little of what we refer to as good in their meals that I don’t know that what they serve can legitimately be called Food any longer. Have you seen the 20 year old McDonald’s Burger that one man still has in its original wrapper? It still looks edible. McDonald’s is dying because they have been killing their brand for years with inferior “food” and a complete lack of taste. Have you tried their eggs recently? The texture is strange and it doesn’t taste like an egg. No McDonald’s is dying by suicide.
Eight something plus tax for a ten piece nugget. Nuggets are definitely not worth a buck each. I get eight piece fried chicken and four rolls for 7.99.