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A key influence within the global economy which has impacted on many firms has been the recession. The general pattern seen in economies during a recession is a decrease in income leading to an aggregate decrease in demand (Nellis and Parker, 2006). The goods and services which are most sensitive to a decrease in demand are the non-essential goods and services bought out of discretionary spending (Nellis and Parker, 2006). McDonald's food is convenience and is not essential, so it is susceptible to a decrease in demand. The firm did see a decrease in some sales in some areas following the start of the recession. The overall results for the firm demonstrated a decreased by 3.3% in 2009, when the turnover fell to $22,745 million compared to $23,522 million in 2008 (McDonalds, 2010). However, the firm showed a smaller decrease compared to many other fast food firms and also managed to recover with a range of strategies.

The menu was adapted and the firm introduced a specific menu selection for the budget conscious; in the U.S. this was the dollar saver menu, in the UK it was the pound saver menu. This included a number of existing items highlighted as well as small specific items introduced, such as the Chicken Mayo in the UK. The firm has also tapped into the provision of alternate products competing with firms that traditionally had higher prices, benefiting from the downshifting of spending. This has included increased ranges of gourmet coffee to provide a lower cost alterative to Starbucks (Newsweek, 2010). There has also be the introduction of other premium drinks, such as smoothies, which is also credited with helping to increase sales by up to 15% in the U.S. (New York Post, 2011). This extension into related goods, which fit in with the menu, but may be seen as a value offering compared to other market suppliers appears to be a very successful strategy which may be extended. As the economy improves and more income is available this may also be a strategy which may also be used to increase the range at the upper end of the menu range.

There are also political influences. A major influence is value added tax, (VAT), a sales tax added by government, In the UK this was recently increased to 20%, which effectively increased the price of products. Many of the measures dealing with the economic issues will be useful here; due to the influence tax has on price. However the firm may also face an interest choice in the future; in a recent European case brought by a German fast food burger seller saw a ruling which stated that VAT should not be paid on food sold for immediate consumption (Bridge, 2011). So far governments, including the UK government have not made any changes, in the UK the government claims this would not have any impact, but it appears that the firm,