Firstly, interest rates have an immediate effect on McDonald’s borrowing. Although the effective interest rate on the company’s debt has gone up a little and is now around 2.9%, minor increases can still affect its profits and choices of investments (Miglo, 2025). The rise in the interest rates, which also affect consumers can, however, increase the chances of their disposable income decreasing which, in turn, can make them become more careful in the spending of discretionary items such as fast food. To solve the problem, McDonald’s’ main mission is to manage capital allocation effectively and keep financial flexibility. This involves the company organizing the use of debts properly and focusing those capital expenditures on high-return projects such as digital transformation, besides reinforcing its value proposition to attract and retain cost-conscious customers.
Secondly, the inflation rate has been one of the major causes for price increases in ingredients, wages and energy prices that have had a direct impact on McDonald’s (Chai, 2019). Nevertheless, while increasing prices compensates for the increasing costs, the risk is in losing customers who are careful about their expenses. If they go too far while raising the prices, some of the customers might react negatively by registering a reduced footfall, as a public backlash shows.
Lastly, McDonald’s has to deal with supply chain problems all the time. The company is proud of its efficient global supply chain, but it is still at risk from natural disasters, geopolitical events, and a lack of workers (Setiawan and Ellitan, 2023). These problems can make raw materials more expensive, deliveries take longer, and even cause ingredient shortages, which can affect the availability of menu items and make customers angry. To make itself more resilient to these problems, McDonald’s’ top priority as a company is to make its supply chain stronger and more flexible. This entails diversifying its sourcing to reduce reliance on single suppliers, investing in advanced technology and data analytics for real-time visibility and proactive issue detection, fostering stronger relationships with key suppliers, and continuing to emphasize local sourcing where feasible to mitigate broader global shocks.
