The Trump administration’s immigration crackdown is eating into sales at US fast-food restaurants, eroding a source of growth the industry long relied on.
Sales growth at chain restaurants slowed sharply in 2024 and 2025, according to researcher Technomic. McDonald’s said this month it would slow its pace of store openings, while Wendy’s and Subway have closed hundreds of locations over the past year. The shift comes at a difficult time for fast food, with inflation taking a bite out of disposable income.
With the birth rate below replacement level for most of the past 50 years, the US has relied almost exclusively on immigration for population growth. But economists estimate more people left the US than entered it last year for the first time in decades, as the Trump administration curtailed immigration and stepped up deportations. Nearly 3mn people left the US last year through a combination of deportations and self-removal, according to government figures.
The vast majority of those targeted for deportation are from Latin American countries — a crucial segment of the fast-food industry, with 35 per cent of Latino people in the US consuming fast food on any given day, according to a 2018 study by the health department.
Analysts and economists said the sector is sensitive to population decline — and that fewer mouths to feed spells a problem for fast food.
“Population growth is certainly a driver of the [fast-food] industry, because pretty much everyone is a customer, including lower-income consumers,” said Brian Harbour, a restaurant analyst at Morgan Stanley.
The link between population and demand has long been recognised by the food industry. In February, Kofi Bruce, chief financial officer of General Mills, said he expected “lower population growth in the US”, alongside increased uptake of weight-loss drugs, to cost the company 50 basis points of growth in its 2027 fiscal year.
Restaurant executives have also pointed to favourable demographics when explaining expansion. As Tim Hortons expanded in a fast-growing Canada, Joshua Kobza, chief executive of parent company Restaurant Brands International, said in 2025: “If you have 1 per cent population growth, then we should be growing more Tim’s.”
Fast-food chains are now confronting the opposite dynamic.
The US population grew 0.5 per cent between July 2024 and July 2025, according to the US Census Bureau, dramatically slower than in recent years.
Economists at the Brookings Institution estimate net migration turned negative in 2025 for the first time in decades and expect the decline will continue in 2026. Tara Watson, a director at Brookings who worked on the research, attributed the reversal to the second Trump administration’s policies, which have “pretty successfully eliminated most traffic at the border”, she said.
“The fast-food industry, in particular, would likely be feeling the pain there,” said Jon Tower, an analyst at Citi.
Combined with a challenging economy, the population slowdown raises another question, Tower said: “Do we have too many stores in the US?”
Since 2021, the number of chain restaurants in the US has grown between 1 per cent and 2 per cent each year, according to Technomic.
But those stores are attracting less business than they once did. Data from Placer.ai shows foot traffic to fast-food stores grew consistently in 2023, then began to fluctuate in 2024 as inflation-strapped consumers cut back on eating out. In 2025 and 2026, fast-food foot traffic declined almost every month. Analysts say some of the decline reflects the continued rise of food-delivery apps, but not all of it.
The mature US fast-food industry also has limited room left to expand. The sector has “been going in its current form for 30, 40 years, so it’s probably plateauing”, said Peter Backman, a restaurant consultant.
Rapid population growth may have eased some of those pressures during Joe Biden’s administration. Watson’s team estimated net migration of 2.8mn people in 2022 and 3.4mn in 2023, well above the roughly 1mn annual inflow she considers “normal”.
That surge could have given businesses an exaggerated sense of the opportunity for expansion, she said.
“If firms thought that [growth] was likely to continue, they might have over-expanded,” Watson said.
The reversal has shown up in restaurant companies’ results. In 2025, as the White House intensified efforts to deport undocumented immigrants, Jack in the Box and Wingstop said sales were suffering as Latino consumers pulled back.
Many fast-food companies reported an improvement in business in the most recent quarter, which executives attributed to lower petrol prices and a stronger consumer economy.
But analysts say the longer-term pressure on growth — and the risk that the US has too many restaurants chasing too few customers — will persist if population growth remains weak.
“If you talk to people in the industry, there’s a sense that this [downturn] is cyclical,” said Harbour, the Morgan Stanley analyst. “I do feel like the ‘over-storing’ piece is a little more structural, and probably something that takes longer to work through.”
