icon
icon
icon
icon
$300 Off
$300 Off

News /

Articles /

Tariffs Spark 24% Harley-Davidson Sales Drop, 15% Hershey's Decline

Word on the StreetThursday, May 1, 2025 10:05 pm ET
2min read

Consumer confidence among the American middle class has plummeted, leading to a significant impact on the sales of major brands such as mcdonald's, Hershey's, and harley-davidson. This decline in confidence is a direct result of economic policies, particularly the tariff measures implemented by the Trump administration, which have created an atmosphere of uncertainty and caution among consumers.

McDonald's reported that its sales in mature U.S. restaurants have dropped to the lowest level since the onset of the pandemic. The company's CEO, Chris Kempczinski, noted that consumers are becoming more cautious with their spending. High-income consumers have maintained their purchasing frequency, while middle and low-income consumers have reduced their spending, with the latter group showing a more significant decrease. This trend is not limited to McDonald's; other fast-food giants such as Chipotle, Starbucks, Pizza Hut, KFC, and Domino's Pizza have also warned of declining sales in the U.S. market.

The impact of these economic policies extends beyond the food and beverage sector. Harley-Davidson, a prominent motorcycle manufacturer, reported a 24% year-over-year decline in motorcycle sales. The company's CEO, Jochen Zeitz, attributed this drop to the uncertain economic outlook and high-interest rates, which have dampened demand both in the U.S. and globally. Despite considering price increases to offset tariff costs, Zeitz acknowledged the challenging environment for discretionary spending. This decline in sales of high-end consumer goods indicates that economic uncertainty is spreading rapidly to a broader range of consumer groups.

Ask Aime: What's the outlook for McDonald's and other fast-food chains amidst the economic downturn and changing consumer spending habits?

General Motors, another major player in the automotive industry, reported that while its sales growth initially outpaced other major manufacturers, the company is now facing significant tariff costs. This has led to a downward revision of its annual profit forecast by $200 million to $300 million. Even after the Trump administration softened the impact of tariffs on automakers, General Motors still expects to raise prices in North America by up to 1%. This is a stark contrast to the pre-tariff environment, where the company anticipated a 1% to 1.5% price reduction. Approximately half of the vehicles General Motors sells in the U.S. are produced domestically, while its most affordable brands, such as the Chevrolet Trax and Buick Envision, are imported from South Korea.

The candy giant Hershey's also felt the pinch, with a 15% decline in sales of its candy, mint, and gum products. The company's executives noted a growing focus on value among consumers. The tariffs on key ingredients like cocoa beans are expected to cost the company between $15 million and $20 million this quarter alone. Hershey's is seeking exemptions for these critical ingredients, as cocoa cannot be domestically produced. This situation highlights the broader impact of tariffs on various sectors, including the food and beverage industry.

Despite the strong performance of some tech companies, such as Apple, which saw a surge in sales due to increased demand for iPhones, analysts warn that the ongoing uncertainty in the U.S. poses a significant risk to both domestic and global economies. The continued market volatility could lead to a further decline in consumer and business confidence, exacerbating the economic downturn. Analysts caution that the risk of a U.S. and global economic recession is increasing, with the greatest danger being the continued market volatility that could trigger a self-reinforcing decline in business and consumer confidence.

Comments

Add a public comment...
Post
User avatar and name identifying the post author
FTCommoner
05/02
$MCD MCDonald's had its worst U.S. sales drop since COVID, and it blames economic anxiety caused by new tariffs. CEO Chris Kempczinski said lower-income customers were affected after the first-quarter sales numbers showed a big dip. The company pointed to "weaker consumer sentiment" and uncertainty as main reasons for the decline.
0
Reply
User avatar and name identifying the post author
Particular-Ad-8433
05/02
Harley-Davidson's dip hits hard. Tariffs turn epic buys into clunkers. Time to hedge bets or hold steady?
0
Reply
User avatar and name identifying the post author
HJForsythe
05/02
@Particular-Ad-8433 How long you planning to hold? Thinking of going long on HOG myself, but want to make sure we're on the same page.
0
Reply
User avatar and name identifying the post author
vanilica00
05/02
Consumer confidence is like a rollercoaster, not stable.
0
Reply
User avatar and name identifying the post author
MysteryMan526
05/02
Middle class spending = caution mode. Long-term investing crucial now. Anyone else heavy on $AAPL?
0
Reply
User avatar and name identifying the post author
DGlatt6969
05/02
@MysteryMan526 I'm all in on $AAPL too. Been a solid play despite the market noise.
0
Reply
User avatar and name identifying the post author
Comfortable_Stage203
05/02
@MysteryMan526 How long you been holding $AAPL? Any other stocks you're heavy on?
0
Reply
User avatar and name identifying the post author
CarterUdy02
05/02
Harley-Davidson feels the pinch, but tech stays strong. Balancing act for consumers and businesses alike.
0
Reply
User avatar and name identifying the post author
joe_bidens_underwear
05/02
MCDonald's struggling; fast-food giants need new strategies. Maybe focus on value meals to attract price-conscious crowd?
0
Reply
User avatar and name identifying the post author
Zhukov-74
05/02
Who's still buying $TSLA at these prices?
0
Reply
User avatar and name identifying the post author
Automatic-Ferret-403
05/02
@Zhukov-74 Still holding long on $TSLA, but thinking of trimming a bit. Market's so volatile, hard to predict.
0
Reply
User avatar and name identifying the post author
curbyourapprehension
05/02
Tariffs are so 2020, long-term outlook still matters
0
Reply
User avatar and name identifying the post author
Elibroftw
05/02
Diversify beyond US, global markets offer opportunities.
0
Reply
User avatar and name identifying the post author
printial
05/02
@Elibroftw True, global markets can be a lifeline.
0
Reply
User avatar and name identifying the post author
Running4eva
05/02
Hershey's in a sticky situation with cocoa bean tariffs. Hope they secure exemptions soon or things might get bitter. 😂
0
Reply
User avatar and name identifying the post author
ProfessorAkaliOnYT
05/02
@Running4eva Hope Hershey's doesn't go sour on the market. Maybe they can sweeten the deal with some tariff magic. 🍫💸
0
Reply
User avatar and name identifying the post author
Assistantothe
05/02
$HOG sales tank, time to reconsider holdings?
0
Reply
User avatar and name identifying the post author
Plane-Salamander2580
05/02
General Motors facing tariff heat; price hikes loom. Wonder how affordable brands will handle the shift.
0
Reply
User avatar and name identifying the post author
Progress_8
05/02
Tariffs hit hard, but diversification saved my portfolio. Still, watching $HOG like a hawk. 🤔
0
Reply
User avatar and name identifying the post author
southernemper0r
05/02
$AAPL holding strong, but broader market jitters make me nervous. Diversifying into renewables for peace of mind.
0
Reply
User avatar and name identifying the post author
googo69
05/02
Hershey's in a sticky situation. Cocoa tariffs are a bitter pill to swallow. Maybe time for some diversification?
0
Reply
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.
You Can Understand News Better with AI.
Whats the News impact on stock market?
Its impact is
fork
logo
AInvest
Aime Coplilot
Invest Smarter With AI Power.
Open App