The decline of McDonald's: How the golden arches lost their luster

TO Going to McDonald’s used to be the most exciting thing that could happen to you. The long, sprawling expanse of childhood was lit up by those brightly colored chairs and walls; the blinding red of the ketchup traffic light; the tingle of too much salt; the tempting new toy waiting to be pulled out of its little plastic bag. If you were invited to a birthday party at McDonald’s, it was like being invited to the Met Gala—if the Met Gala included giggling, screaming children running around the courtyard and an appearance by Ronald McDonald. My parents only accepted me as an infrequent treat (they didn’t like how unhealthy the chicken nuggets and fries were, or the idea of ​​letting us do whatever we wanted too often), but that only added to its appeal.

Even when I was in my teens and early twenties, McDonald’s still held a special place in my heart. After all, it is the most famous fast food joint in the world, and it’s been a constant presence since 1940. The brightly lit joints, many of which stay open 24/7, became beacons, either as conveniently cheap places to meet friends and talk for hours or as reliable late-night spots to feed hungry, drunken stomachs. I’d always looked up to those golden arches fondly, but not so much anymore. This year, I’ve only been to McDonald’s once.

It’s not just me. In July, McDonald’s announced that its sales had fallen by 1% worldwide across all segments of the business between April and June. That may not sound like much, but this is the first drop in sales the fast food giant has seen since the final quarter of 2020. Back then, they could blame the pandemic for forcing them to close their doors. Now, a drop of just 1% in sales has caused the company’s net profit to fall by 12% to $2bn (£1.55bn).

According to the company, the reason for the drop in sales is the current cost of living crisis that is affecting consumers around the world. In the UK, inflation has risen by 2.2% and high food prices mean people are still having to tighten their belts whenever they can. The drop in sales came despite McDonald's launching a deal that allows customers to get three items for just £3. However, across the rest of the menu, prices have gone up. For example, a Big Mac currently costs £4.59, almost double what it cost in 2014. In 2022, you could get a chicken and mayo for just 99p on the Saver menu, but it now costs £1.19. That may not sound like much, but inflation has hit every aspect of life so hard that every penny counts even more than before.

McDonald's remains a symbol of American dominance and an indelible part of global culture. But those heady days of unwrapping a delicious, greasy cheeseburger and dipping fries into soft serve ice cream seem part of a bygone era for the brand. It's not just the cost-of-living crisis that may be keeping people from going to McDonald's. Some customers have suggested there's been a noticeable decline in quality, too. “I don't remember Big Mac burgers being any thinner than pickles. Time to start calling them 'little burgers,'” said one Reddit user.

The sense that something has changed plays a big part in why I feel less drawn to Maccy D's. It's not a gourmet burger, to be sure, but biting into a double cheeseburger used to provide a very specific kind of pleasure. My favorite parts were how the bun was slightly soft and squishy after being lightly steamed in its wrapper, and picking out the largest corner of the gooey, melted cheese to save for the last bite. But more recently, the burger was small and dry; the patties thin and unsatisfying; the fries, unforgivably soggy.

It probably doesn't help that health consciousness has increased in recent years, meaning the 406 calories in an unsatisfying double cheeseburger (equivalent to almost a quarter of a woman's recommended daily intake) might be better consumed elsewhere. Fast food and public health have been at odds for decades, not least since Morgan Spurlock's 2004 documentary. Super Size Me It set the tone for a moral panic about fatness that McDonald's has never escaped, even though no scientific research has been able to reproduce the deleterious mental and physical effects that presenter Spurlock claimed to suffer from eating larger amounts of burgers, fries and soda every day. However, our more wellness-focused era has driven demand for healthier fast food, a space that has been filled by brands such as Leon and Pure, which position themselves as “natural” and “good” for you.

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Even if you wanted something quick and tasty, there are now plenty more competitors in the fast food game. While McDonald's, Subway, KFC and Burger King still sit at the top of the list of the world's biggest fast food restaurant chains, they are by no means the only options we have these days. A wealth of fast food options greet you on the high street, from Greggs to Shake Shack and Wingstop.

In fact, Greggs is the most popular takeaway brand in the UK today, beating McDonald's by 2 per cent, according to a recent YouGov survey. The Newcastle-based bakery has more than 2,450 stores across the country and this year knocked McDonald's off the top spot in the UK's takeaway breakfast market. Greggs' breakfast bundle, which includes a sausage, bacon or omelette roll and a drink, starts at £2.85. In a bid to beat its rival, McDonald's has cut the price of its breakfast bundle, which includes either a sausage and egg McMuffin or an egg McMuffin and a drink, to £2.79. However, Greggs remains the leader in this space.

Another reason McDonald's may be losing ground is that there's a new generation of consumers calling the shots. While baby boomers and millennials still cling to nostalgia, Gen Z and Gen Alpha want different things. Where they eat (and, perhaps more importantly, where they're seen eating) is increasingly becoming a lifestyle choice they can share online for the world to see, says Carl Clarke, co-founder of Chick'n'Sours and Chicken Shop. A makeshift Big Mac just doesn't seem ambitious enough for the web, compared with a fried chicken burger piled high to the sky.

Clarke, who is in the process of launching a new fast-food concept called Chow Chow, says: “The younger generation wants value, they want convenience, they want quality. They also want to know what a company is doing in the world beyond the walls of the restaurant, and they want to be with you and be able to tell their friends about you. Lifestyle is becoming more important as a choice.

“McDonald’s is an absolute world leader in convenience, but when it comes to innovation and lifestyle, I wonder if McDonald’s has lost that touch… This generation of customers don’t want to go somewhere and just buy the food, they want to be on social media telling their friends about it, wearing it. It’s all-encompassing.” A great example of this is Greggs’ collaboration with Primark, which saw festival-goers proudly and unironically don Greggs-branded bucket hats and sandals to party.

Clarke’s argument that people are more interested in what brands do beyond their business is increasingly relevant. McDonald’s faced criticism for its apparent support of Israel in its war on Gaza earlier this year, with large numbers of people deciding to boycott the franchise around the world. The widespread boycott caused the company to miss a key sales target – its first quarterly sales loss in nearly four years. A similar fate recently befell Starbucks, which fired its chief Laxman Narasimhan amid falling sales and customer boycotts over his alleged ties to Israel.

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McDonald's chief executive Chris Kempczinski said the backlash was due to “misinformation” in Middle Eastern markets and other Muslim-majority countries such as Malaysia and Pakistan. The boycott even spread to the UK, perhaps unsurprisingly given that tens of thousands of people joined pro-Palestine marches across the country. The company's British unit issued a statement denying support for “any government involved in this conflict” but the damage had already been done.

“For fast food brands and chains, it’s not just about the food,” Clarke says. “You have to look for opportunities to do meaningful things, make collaborations valuable. You just have to be very transparent, honest and human.” In the process of launching Chow Chow, Clarke says he’s keen to start a fast food business that fosters a real sense of community, is accessible and has “a lot of personality” – all things McDonald’s has become too big for. The company’s gargantuan size and relentless pursuit of profits means any attempt to get involved in communities feels commercialised.

Does this mean McDonald's is over? Don't bet on it. It has a rare status in global culture that gives it a sense of unshakeable permanence. Convenience is king, and McDonald's is the king of convenience, so people will always go there when they need something fast and reliable. But perhaps something less tangible has been lost in a shift that feels more like a drive-thru than a birthday party, more like a pit stop than a debriefing after a night out. Whether those golden arches can regain their luster remains to be seen.