McDonald’s global sees drop in sales

Posted by AFN Staff Writers on 17th November 2014
McDonald’s global sees drop in sales
McDonald’s global sees drop in sales

McDonald’s Corporation has announced that global comparable sales decreased 0.5 per cent in October 2014, which it said reflected the impact of “business challenges” such as an ongoing supplier issue in Japan and China.

In the US, McDonald’s sales decreased by 1 per cent, amid strong competitive activity.  McDonald’s said it was revamping its marketing approach in the US to restore business momentum, as well as simplifying its menu and creating a new organisational structure.

McDonald’s said these initiatives were designed to “better address consumer preferences and the competitive dynamics of the local markets in which we compete by bringing decision making closer to our customers”.

“Today’s consumers increasingly prefer customisable food options, dining in a contemporary, inviting atmosphere and using more convenient ways to order and pay for their meals,” said Don Thompson, McDonald’s President and Chief Executive Officer.

“At McDonald’s, we are diligently working to bring these elements of the customer experience to life through McDonald’s Experience of the Future,” Mr Thompson said. “Although October results reflect our current business challenges, we are moving with a sense of urgency to improve the trajectory of our financial performance while taking the actions necessary to pursue the Brand’s long-term potential,” he said.

Europe sales also down

McDonald’s reported that Europe’s comparable sales decreased 0.7 per cent in October as solid performance in the UK was more than offset by very weak results in Russia due to factors related to the operating environment, including temporary restaurant closures. These factors, along with the significant weakening of the euro and Russian ruble, negatively impacted the segment’s reported systemwide sales.

Strong performance in Australia partly offsets Asia Pacific sales decrease

McDonald’s reported that although sales for its Asia Pacific Middle East and Africa (APMEA) group decreased by 4.2 per cent in October 2014, reflecting the ongoing impact of the supplier issue on performance in Japan and China, this was partly offset by strong performance in Australia.

McDonald’s said the markets affected by the supplier issue were “actively executing multi-faceted initiatives to restore customer trust in the McDonald’s brand” while the broader APMEA segment is pursuing long-term opportunities to drive customer traffic and loyalty with unique menu, affordability and convenience options.

Strong comparable sales in McDonald’s Other Countries & Corporate segment, which includes Canada and Latin America, contributed positively to the Company’s global comparable sales performance for the month.

Systemwide sales for the month decreased 3.4 per cent, or increased 1.9 per cent in constant currencies.