Introduction
In April 2025, McDonald’s reported a drop in U.S. customer visits for the third consecutive quarter. On the surface, it looked like a business adjusting for inflation. But beneath that was a much clearer economic signal: American consumers, especially low-to middle-income ones, are pulling back, not just on luxuries, but on value meals. This isn’t just about fast food. It’s about a sluggish consumer economy.
While central banks rely on complex macroeconomic models and delayed data sets, McDonald’s offers something more immediate and arguably, more telling. With over 40,000 locations across 100+ countries and millions of daily transactions, McDonald’s operates like a high-frequency barometer for consumer sentiment, wage dynamics, and inflationary pressure. In other words, it’s a more straightforward, to the layman, near-term indicator than the Federal Reserve’s more abstract and technical tools.
The Big Mac Index
This idea isn’t new. In 1986, The Economist created the Big Mac Index, a light-hearted but insightful way to gauge purchasing power parity (PPP) between currencies. The logic: a Big Mac is a standardized product sold globally, so its price in local currencies should reflect relative cost of living and economic strength.
For example, as of early 2025, a Big Mac costs $5.69 in the U.S., but only $3.10 in Mexico. That suggests the peso may be undervalued or that wages and food input costs are vastly lower. It’s a clever shortcut for comparing complex economic systems. What’s even more revealing, though, is how those prices evolve over time. When Big Mac prices spike in one country or stay unusually flat in another, it often reflects deeper economic pressures like inflation, wage stagnation, or shifting consumer behaviour, insights that tend to show up in earnings quite before official reports.
I’m Not Lovin’ It
McDonald’s U.S. foot traffic has been falling even as sales per customer increase. This suggests fewer overall visits, likely because inflation and stagnant wages have made even fast food feel expensive. When customers who once relied on the Dollar Menu, they must now spend $10+ on a basic combo meal, some decide to opt out altogether.
This kind of behavioural shift is what economists call demand destruction, and it’s a lagging but serious sign that discretionary spending is weakening. And since McDonald’s is both affordable and convenient, changes in its customer traffic offer a quick, real-time glimpse into the financial health of everyday people and especially of working-class households.
Compare this to traditional economic indicators like the Consumer Price Index (CPI), which is updated monthly and often revised, or GDP, which is reported quarterly and looks backward. These measures rely on complex surveys, sample collections, and statistical models, all of which take time to process and verify. McDonald’s data, on the other hand, comes almost instantly from real-time sales and point-of-sale analytics, reflecting actual money spent, not estimated or adjusted numbers. That immediacy gives a clearer, fresher snapshot of consumer behaviour with no waiting or revisions, just raw economic reality served up fast.
You Want Fries with That?
McDonald’s is one of the largest employers of hourly and entry-level workers in the world. That makes it a canary in the coal mine for wage dynamics.
In California, where the minimum wage for fast food workers recently increased to $20 an hour, McDonald’s and other chains have raised menu prices and cut employee hours to manage higher labour costs. At the same time, many restaurants elsewhere are turning to automation, such as self-service kiosks, app-only deals, and AI-driven drive-throughs, as a way to offset rising wages.
These changes don’t just reflect corporate strategy; they provide a firsthand look of where wage inflation is hitting hardest, and how employers are responding. You don’t need a BLS (Bureau of Labor Statistics) report to know that a hiring slowdown or cut in crew shifts is a sign of economic tightening.
Lettuce Pray
McDonald’s pricing is also directly tied to global commodity trends. Beef, cheese, bread, lettuce, all of these have seen price volatility due to everything from droughts to war-related supply chain disruptions. When McDonald’s adjusts its menu prices, it’s usually a direct pass-through of raw material costs. That’s true inflation in action, not filtered or adjusted for seasonal effects.
In 2022, for instance, surges in sunflower oil prices (due to the war in Ukraine) led to immediate changes in fry preparation across several European markets. No theoretical model was ever required, since the impact was clearly visible in store menus.
Buns Beyond Borders
McDonald’s operations across dozens of economies also allow for near real-time comparisons of local economic conditions. In countries like Japan, where deflationary forces persist, McDonald’s has kept prices flat to avoid losing foot traffic. In contrast, in Argentina or Turkey, where inflation has skyrocketed, price hikes are constant and reflect deeper currency crises.
These simple indicators, like how much McDonald’s charges for a meal or how many people are still eating there can reveal how everyday consumers around the globe are reacting to different economic phenomena like inflation or interest rate changes. This consumer reaction often shows up faster than official government data.
Conclusion
None of this is to say the Fed is irrelevant, far from it. Consumer reaction, along with scientific models, thought and data, should always go hand in hand to reach useful and educated conclusions and actions. Most times, however, there’s a time lag in macroeconomic indicators, they are subject to revision, and they require thorough interpretation. McDonald’s, by contrast, offers direct, unfiltered signals about how real people are spending, eating, and earning, often well ahead of those patterns showing up in formal economic data.
Additionally, McDonald’s can serve as an indicator for a very important element of everyday life: public anticipation and expectations. Whether this is optimism or growing unease about the economy, it is something that is not easily measured in numbers, but rather something that shapes them and should not be discarded.
So, the next time an economist speculates about whether inflation has “cooled” or if a soft landing is on the horizon, it might be worth checking McDonald’s earnings call first. Sometimes the clearest signals don’t come with spreadsheets or models, they come with fries!
“THE REVITA TEAM”
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