Stocks of McDonald's and other fast food giants rise, but challenges from Trump tariffs loom

Sat, Mar 8, 2025, 8:00 AM 5 min read

President Trump's tariffs are throwing a wrench successful accelerated nutrient giants' plans arsenic the manufacture continues to conflict with rising costs and little ft traffic.

However, jittery investors whitethorn beryllium looking toward worth chains that could triumph implicit budget-conscious diners. On Friday, shares of McDonald's (MCD) deed a grounds high. Over the past week, its banal roseate 5%, adjacent arsenic tariff quality roiled the broader market.

Yum Brands' (YUM) (KFC, Pizza Hut, Taco Bell) shares are up 22% twelvemonth to date, portion Restaurant Brands International (QSR) (Burger King, Tim Hortons, Popeyes) person climbed 6%. S&P 500 returns are fundamentally level connected the year.

Meanwhile, shares of Chipotle (CMG), Cava (CAVA), and Shake Shack (SHAK) sank 9%, 11%, and 15% successful the past week, respectively, a reversal of fortunes arsenic investors successful caller years person favored the much upscale, fast-casual sector.

McDonald's "value paper is driving affirmative impermanent postulation successful a slowing situation for astir each different restaurants," Wedbush expert Nick Setyan told Yahoo Finance. "It’s each astir a rotation into the larger players fixed the uncertain marketplace situation too."

The semipermanent aboriginal of the manufacture remains cloudy. The "unpredictable nature" of tariff announcements is causing frustration, from franchise owners to the manufacturing assemblage to agribusiness, Phil Kafarakis, CEO of the Food Away From Home Association (IFMA), told Yahoo Finance.

On Thursday, President Trump extended a one-month tariff exemption to goods compliant with the United States-Mexico-Canada Agreement (USMCA). He initially announced a 25% tariff connected Canada and Mexico successful February but has since paused them twice.

Non-compliant goods volition inactive wage the caller duties. The exemption is scheduled to expire connected April 2, erstwhile Trump is expected to denote his reciprocal tariff plan.

Though restaurants root much items domestically, Neil Saunders of GlobalData told Yahoo Finance that tariffs inactive marque it highly challenging to program ahead.

The Budget Lab astatine Yale predicts that wide prices for gas, rubber and integrative products, processed rice, machinery and equipment, vegetables, fruit, sugar, and dairy could summation successful the low- to mid-single digits.

One McDonald's franchise proprietor told Yahoo Finance it's inactive chartless what this could mean for instrumentality costs, calling it "nerve-racking" erstwhile it already costs astir $25,000 for 1 portion of room equipment.

Utility prices volition besides impact restaurants, adjacent if vigor is subjected to little duties.