McDonald's CEO Chris Kempczinski stated on Wednesday that the fast-food chain anticipates ongoing challenges from flat customer traffic and high inflation affecting the restaurant industry. During an interview on CNBC's "Squawk on the Street," Kempczinski emphasized the need for the team to adapt to these conditions, noting, "We need to stop talking about that being a difficult environment, and just say that is the environment." He indicated that there are no expected changes in this landscape moving forward.

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For several years, Kempczinski has alerted investors and analysts about the tough times facing both McDonald's and the broader sector. In the most recent quarter, the chain reported a modest U.S. same-store sales growth of 0.8%, accompanied by a decline in domestic restaurant traffic. Consumers are dining out less frequently, responding to rising menu prices amid escalating costs for essentials such as gas and groceries. According to a survey conducted by the National Restaurant Association, industry operators reported a net drop in customer traffic every month from August 2025 to July 2026, with one exception.

To attract patrons, McDonald's and its competitors have turned to discounts. However, rising costs are impacting both diners and restaurant operators, including McDonald's and its franchisees. Kempczinski noted that beef prices have nearly doubled over the last five years in key markets. Additionally, labor and construction costs have also increased, straining profit margins. He remarked, "Across the board, we're seeing that inflation is sticky... not just in the U.S., but around the world."

In response to these tough operating conditions, McDonald's is aiming to capture market share from its competitors. Kempczinski stated, "The biggest thing that you need to do in an environment like this is you have to be able to earn share." He mentioned that while the company may need to consider further price hikes, there is a risk of alienating customers. He acknowledged past mistakes in rapidly raising prices following the Covid pandemic.

More details regarding McDonald's strategies to enhance market share are expected to be shared during the company's investor day on Wednesday.