McDonald’s experienced its first global sales drop in over three years, with a 1% decline in comparable sales for the second quarter, contrary to analysts’ expectations of a 0.5% increase. CEO Chris Kempczinski attributed the downturn to inflation, which led consumers to choose more budget-friendly dining options over McDonald’s pricier items.

Despite a 1% rise in overall revenue, the company struggled with low consumer confidence and increased menu prices, particularly for popular items like the Big Mac, which deterred some customers.

Read more: McDonald’s Outlets in Sri Lanka Shut Down Due to Poor Hygiene Case

To address changing consumer habits, McDonald’s introduced a $5 meal deal in June, intending to attract budget-conscious diners. The promotion will continue through August as part of McDonald’s strategy to adapt to economic pressures and maintain market competitiveness.