Lower-income Americans can't afford McDonald's. What does it mean for the economy?

The dollar (menu) doesn’t spell arsenic acold arsenic it utilized to.

Foot postulation from lower-income customers is down by astir treble digits, McDonald’s enactment said portion announcing third-quarter net successful aboriginal November. That makes the fast-food elephantine conscionable the latest successful a drawstring of value-priced companies seeing lower-income Americans conflict to spend their products.

Lower-income consumers are facing “pressures,” CEO Chris Kempczinski told analysts.

“You're seeing crossed the country, rents are astatine beauteous precocious levels. You're seeing nutrient prices, whether it's successful restaurants oregon grocery, you're seeing nutrient prices are high. You're seeing childcare is high,” Kempczinski said. “There's immoderate important ostentation determination that the low-income user is having to absorb.”

In September, meanwhile, market institution Kroger highlighted that “low- and middle- income households are truly looking for deals. They're utilizing coupons more. They're making smaller but much predominant trips. And they're buying much backstage statement products. They're besides eating retired less.”

And successful October, Chipotle’s CEO said “low to middle-income guests” are making less visits to the burrito chain.

As antecedently reported, the retreat by lower-income Americans is portion of what immoderate analysts telephone a “K-shaped economy:” those with less resources are doing poorly portion upper-income consumers proceed to spend.

More: Does the U.S. person a 'K-shaped economy'? What it means for you.

Visits by much affluent consumers to McDonald's are up by astir treble digits, Kempczinski said. And they aren’t conscionable spending connected Happy Meals. In October, LVMH, the planetary luxury conglomerate that owns brands similar Christian Dior, Fendi, and Tiffany & Co., had a better-than-expected quarter, sending its banal 12% higher.

In fact, the buoyant banal marketplace is 1 of the biggest reasons higher-income Americans are capable to walk more. Roughly 87% of households earning implicit $100,000 ain stocks, versus conscionable 28% of households earning little than $50,000.

Meanwhile, large companies proceed to spot a widening divided betwixt the haves and have-nots.  For Procter & Gamble, shaper of diapers, soaps, and different wellness and quality aids, that means higher-income consumers are capable to walk much connected bigger sizes that connection much worth for the money, portion lower-income shoppers wage what they tin for smaller sizes.

Those consumers, said CFO Andre Schulten, “continue to unrecorded paycheck to paycheck.”

This nonfiction primitively appeared connected USA TODAY: McDonald's reports driblet successful lower-income diners. What does it mean?