Apps and Digital Deals Connect With Cautious Consumers in Q2

Fast-food chains are still ringing up sales, but the diners they serve look different from a year ago.

McDonald’s said this week that profit for the spring quarter rose 11% to $2.25 billion, helped by a 3.8% gain in worldwide same-store sales. But growth at U.S. outlets slowed to 2.5%. Executives pointed to “continued pressure” on lower-income customers even as the company leaned on value meals and mobile-app deals to keep traffic moving.

Yum Brands’ Taco Bell, meanwhile, logged 4% comparable-store growth at home and double-digit gains overseas, offsetting weaker numbers at sister chains KFC and Pizza Hut. The results track with industry data showing fast food outpacing sit-down restaurants as inflation squeezes household budgets.

Consumers “are watching every dollar,” said Morningstar analyst Sean Dunlop. “They’ll still spend for convenience, but only if they feel they’re getting a deal.”

That bargain hunt is reshaping the business. McDonald’s reported that buying tied to its loyalty program reached about $9 billion in the quarter, part of roughly $33 billion in digital sales over the past year. Yum said online and app orders across its brands now top $30 billion annually, with Taco Bell leading the charge.

Tech is doing more than book sales. Chains are automating kitchens, drive-thru lanes and back offices to blunt rising labor and food costs. Square research shows labor as a share of sales edging lower at quick-service restaurants, crediting kiosks and order-ahead apps that let outlets run with smaller crews.

McDonald’s is testing voice-controlled drive-thru ordering and automated beverage stations. Taco Bell’s newer “Go Mobile” stores use dual drive-thru lanes, curbside pickup and computer vision to alert cooks when an app customer pulls in. Smaller footprints help trim rent while handling more cars per hour.

Artificial intelligence is also making menus more personal. Software that weighs weather, local events and purchase history can swap in a breakfast sandwich for a burger on a cold morning or push a late-night combo on a college campus. Consulting firm ZS says such targeting can lift ticket sizes by as much as a quarter.

Investors have rewarded the efficiency play. McDonald’s shares are up about 15% this year, while Yum has climbed 11%. Still, both companies struck a cautious tone for the rest of 2025. With student-loan payments back on the calendar and wage gains cooling, executives said they plan to lean harder on low-price bundles to protect traffic.

Analysts expect the next leg of growth to come from further retooling the drive-thru. Chains are rolling out dual- or even triple-lane formats timed by AI that predicts when each car will reach the pickup window. Some are experimenting with buy-now, pay-later options and card-linked discounts that apply automatically at checkout.

“Digital isn’t a side door anymore — it’s the front door,” said Greg Creed, former Yum chief executive and a consultant to several restaurant companies. “The brands that win will be the ones that treat the app as the restaurant.”

For now, diners seem to agree. They may be pinching pennies, but if an app can shave a few minutes off lunch and throw in a free fries, they’ll keep coming back — even if they order the $5 bundle instead of the $10 combo.