McDonald’s has registered a decline in its global sales for the first time in more than three years, with cost-conscious consumers turning to more economical options and reducing their dining out expenses.

Global sales at McDonald’s decreased by 1 percent in the April-June period, marking the first decline since the final quarter of 2020, when the COVID-19 pandemic and government restrictions led to business closures and confined millions to their homes.

Outlets in licensed markets designated as international developmental, which are managed by licensees, experienced a more pronounced drop, with sales declining by 1.3 percent due to weak consumer sentiment in China and boycotts in the Middle East linked to the fast-food giant’s alleged backing for Israel.

Chris Kempczinski, CEO of McDonald’s, remarked on how consumers have become more discerning in their spending habits, with many no longer frequenting the market, opting to eat at home, and exploring other cost-saving methods.

While McDonald’s is still perceived by customers as offering the best value among fast-food chains, there has been a narrowing of the "value leadership gap" with its competitors, according to Kempczinski.

Addressing investors in a conference call, Kempczinski acknowledged the trade-down phenomenon but highlighted that the drop in low-income consumers outweighs the benefits derived from this trend.

Despite the underwhelming performance, McDonald’s shares surged by 4.5 percent on Monday morning as investors expressed confidence in the company’s strategies to reverse its fortunes.