McDonald’s CEO is grappling with a ‘two-tier economy’ as he slashes prices on value meals—and signals backing for a minimum wage increase

RetailRestaurantsMcDonalds CEO is grappling with a two-tier economy as he slashes prices on value mealsand signals backing for a minimum wage increaseBy Nick LichtenbergBy Nick LichtenbergFortune Intelligence EditorNick LichtenbergFortune Intelligence EditorNick Lichtenberg is Fortune Intelligence editor and was formerly Fortune's executive editor of global news.SEE FULL BIO McDonalds sees two tiers in the economy.David Paul MorrisBloombergMcDonalds is banking on burgers and fries to tell a bigger story about the American economy. Chief executive Chris Kempczinski is slimming down the cost of the fast-food giants value meals as he grapples with what he calls a two-tier economya widening divide between consumers who are still spending freely and those who are pulling back. For years, dating back to the 2022 inflation wave, McDonalds and its fast-food rivals have contended with shopper frustration over rising menu prices, with combo meals increasingly breaking into double digits. Customers at the higher end of the income spectrum continue to order premium products and use delivery apps at healthy rates. Lower-income diners, however, are cutting back, Kempczinski argued in an interview on CNBCs Squawk Box, treating fast food less as a daily convenience and more as an occasional splurge. He told the anchors that McDonalds has been on a value journey over the past year or so. Particularly with middle- and lower-income consumers, theyre feeling under a lot of pressure right now, Kempczinski told the CNBC anchors. Theres a lot of commentary around, Whats the state of the economy, hows it doing right now? And what we see is, its really kind of a two-tier economy. *Reporting by Fortune.*