You come home after a long day, toss your keys on the counter, and flip through the mail. You’re still feeling the weight of the market crash that’s been going on for weeks. The economy’s in a slump, layoffs are happening, and everyone is tightening their belts. You open your brokerage account, your stomach turns at the sight of red, and you feel a little smarter than the folks who are holding onto stocks that have already plummeted.
But as you sit there, trying to figure out what to do next, you hear it, your stomach growls. It’s been a long day, and you need something to eat. You open the fridge, grab a box of cereal, and pour yourself a bowl. As you munch, you think about what’s really happening behind the numbers in the stock market and the businesses’ products you still purchase.
When times get tough, some businesses just keep on chugging. Two of them are Procter & Gamble (P&G) and McDonald’s. These companies have been around long enough to see the highs and lows, and they’ve figured out the secret to staying strong during a downturn: people still need their products.
The Secret Sauce of Defensive Stocks
If you’ve been keeping an eye on your portfolio, you might’ve noticed something: not all stocks tank when the market goes down.
What makes some stocks better equipped to ride out a recession? It comes down to a few things, and P&G and McDonald’s tick every box:
- They sell products people need, not just want.
- They have powerful, recognizable brands that people trust.
- Their business models are built to weather any storm.
So when the economy takes a hit, these companies don’t just survive, they thrive.
Why Procter & Gamble (P&G) Still Sells When Money Is Tight
P&G is one of the biggest names in consumer goods, owning brands like Tide, Pampers, Gillette, and Crest. These are household names, products people use daily, regardless of what’s happening in the economy.
Think about it: even in a recession, you still need toilet paper. You still need soap. Your kids are still going to need diapers. You can’t exactly trade down to something “cheaper” when it comes to basic hygiene and household necessities. People aren’t going to stop washing their clothes or brushing their teeth because money’s tight, they might just buy a little less, or choose the generic version. But for the most part, these products aren’t luxury items, they’re essentials.
P&G is a master at making products that fit into people’s everyday lives. They’ve created brand loyalty over generations. You don’t just buy Tide because it cleans clothes, you buy it because you’ve used it for years, and you trust it. Same goes for Pampers, Gillette, and every other household staple they make.
Here’s some cold, hard data: Even during the 2008 financial crisis, P&G’s stock dipped, but sales for its essential products held steady. People weren’t forgoing their shampoos or diapers. In fact, P&G was able to increase its dividend during the crisis, proving just how resilient its business model is.
Why McDonald’s Still Sells When Money Is Tight
Now, let’s talk about McDonald’s. It might seem like an unlikely defensive stock, after all, people often think of fast food as something you splurge on, not something you need. But when the economy’s rough, McDonald’s is the place people turn to for an affordable meal that’s fast and familiar.
During a recession, eating out might feel like a luxury, but McDonald’s has mastered the art of the affordable meal. A $5 burger might not be what it used to be, but it’s still one of the cheapest meals you can grab when you’re on the go. And in 2025, it’s important to use the McDonald’s app, you’ll find deals like $1 fries, BOGO sandwiches, or limited-time offers that don’t even show up on the touch screens inside the restaurant. That’s how regulars stretch their dollar and still get a little comfort without overspending.
On top of that, McDonald’s is everywhere. With over 38,000 locations worldwide, it’s not just a brand, it’s a global institution. You can walk into a McDonald’s in the U.S., Japan, or Brazil and know exactly what you’re going to get. That consistency is key when times are tough.
McDonald’s also knows how to adapt during economic downturns. They have a proven ability to roll out new promotions, adjust their menu for cost-conscious consumers, and keep the lines moving, even when the economy slows down.
And let’s not forget: McDonald’s has been doing this for decades. Even when recessions hit, they don’t panic, they double down on what works. During the 2008 recession, McDonald’s posted record sales. People may have been cutting back on expensive meals, but they still wanted the comfort of familiar food at a price they could afford.
The Recession-Proof Business Model
So, why do P&G and McDonald’s stand out during a downturn? It’s because both of these companies have resilient business models. Let’s break it down:
1. Products People Need, Not Just Want
P&G sells essentials, not luxury items. When money gets tight, people don’t stop using soap, detergent, or toothpaste. These are things people need, no matter the state of the economy.
McDonald’s, on the other hand, offers a low-cost meal that satisfies cravings without breaking the bank. When people are watching their wallets, McDonald’s becomes the affordable escape.
2. Brand Loyalty That Doesn’t Quit
Both companies have powerful brands that people trust. Whether it’s the classic McDonald’s arches or the trusted P&G logo on a bottle of Tide, people feel loyal to these brands. Loyalty doesn’t disappear just because the economy stumbles. If anything, it grows stronger.
3. Global Reach and Adaptability
Both McDonald’s and P&G are global giants. They’re not tied to one country or one specific product. P&G sells thousands of different products in multiple categories, from health to cleaning to beauty. McDonald’s has locations in nearly every country on the planet. No matter where you live, you can rely on these companies to be there when you need them.
The Numbers Behind the Resilience
Let’s talk some numbers. During the 2008 financial crisis, McDonald’s saw a 14% increase in global same-store sales. That’s right, growth during one of the worst recessions in recent history. People were choosing the cheaper option, and McDonald’s was there to deliver it.
P&G, on the other hand, increased its dividend every year during the crisis, proving that its business fundamentals were strong even when the market was crashing. And it wasn’t just a one-time thing, P&G has raised its dividend for 63 consecutive years.
What This Means for You as an Investor
When the market dips, some stocks just fall apart. But others, like P&G and McDonald’s, have proven they can weather the storm. If you’re thinking about building a portfolio that can stand the test of time, regardless of what’s happening in the economy, you need to look for companies like these.
- Steady demand for essential products.
- Strong, recognizable brands with deep loyalty.
- Resilient business models built to withstand tough times.
Investing in these kinds of stocks isn’t about flashy gains, it’s about long-term stability and consistent growth, even when the market isn’t playing nice.
Final Thoughts
When the economy is in trouble, it’s easy to panic. But the truth is, the market is a lot more complicated than it seems. Some companies, like Procter & Gamble and McDonald’s, are built to handle downturns. They’ve proven their resilience time and time again.
The next time you see the market crashing and wonder which stocks will survive, remember: it’s not just about what the market’s doing. It’s about the businesses behind those stocks, and whether they’ve built a brand and a product line that people can’t live without, even in the toughest of times.
TL;DR – Why P&G and McDonald’s Still Sell in a Recession:
- People still need essential products, even when times are tough.
- Brand loyalty keeps these companies strong through economic downturns.
- Both companies have global reach and flexible business models.
- McDonald’s and P&G are built to thrive in both good times and bad.
The Broke College Student 
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