McDonald's CEO: Persistent Inflation and Flat Traffic Are the New Normal

McDonald's Corp. expects persistent high inflation and flat customer traffic to be permanent features of the restaurant industry, according to CEO Chris Kempczinski, signaling a strategic shift toward capturing market share in a challenging new environment.

A New Operating Reality

Speaking on CNBC's "Squawk on the Street" on Wednesday, Kempczinski said the company must accept the current economic conditions as the new standard rather than a temporary difficulty. "One of the things I've talked to our team about is we need to stop talking about that being a difficult environment, and just say that is the environment," he stated.

Kempczinski added that the company is not anticipating a change in these conditions. He emphasized that cost pressures are a global issue, noting, "Across the board, we're seeing that inflation is sticky. It's sticky, not just in the U.S., but around the world."

Consumer and Cost Pressures

The CEO's remarks follow a period of weakening performance for the fast-food giant. In its most recent quarter, McDonald's reported that U.S. same-store sales grew by just 0.8% as traffic to its domestic restaurants fell.

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This trend reflects a broader industry slowdown as consumers, facing higher prices on essentials, are eating out less frequently. Citing data from the National Restaurant Association, the source noted that operators reported a net decline in customer traffic in nearly every month from August 2025 to July 2026.

At the same time, McDonald's is facing significant cost increases. Kempczinski pointed out that beef prices have nearly doubled over the last five years in the company's biggest markets, in addition to rising labor and construction expenses.

Strategy Shifts to Market Share

In response, McDonald's is adjusting its strategy to prioritize taking business from its competitors. "The biggest thing that you need to do in an environment like this is you have to be able to earn share," Kempczinski said. "You have to be able to actually grab growth from your competitors."

To attract price-sensitive diners, the company and its rivals have turned to discounts. Kempczinski also said the chain would be cautious with future price increases, reiterating that the company believes it raised prices too quickly in the years after the Covid pandemic. More details on the company's plans are expected to be shared during its investor day on Wednesday.