Hold the fries: McDonald’s sees North American sales slip further
OAK BROOK, Ill. – McDonald’s Corp. says that a key global sales figure slipped 0.5 per cent in October, with weakness in the North America and ongoing difficulties from a food-safety scandal in China weighing down its business.
The world’s biggest hamburger chain said Monday that the decline in global sales at locations open at least 13 months included a 1 per cent drop in the U.S. and a 4.2 per cent decline for the unit that includes the Asia-Pacific region, the Middle East and Africa.
McDonald’s Asia division has been trying to bounce back since the summer, when a TV report in China showed workers at one of its suppliers repackaging meat that was alleged to be expired. The claim has not been publicly confirmed by the supplier or the government.
The Oak Brook, Illinois, company said comparable sales for Europe fell 0.7 per cent in October due to softness in Russia.
In Canada, McDonald’s is facing similar pressure as in the United States, where consumers are electing for rivals whose menus feature products considered healthier.
A year ago, overall global sales were 0.5 per cent in October.
President and CEO Don Thompson said consumers are increasingly looking for food where they have the option to customize it to their liking, as well as places that have convenient ways to order and pay.
McDonald’s previously announced that it plans to expand its “Create Your Taste” offering that lets people pick the buns and toppings they want on burgers by tapping a touchscreen.
The chain said that its U.S. restaurants were hampered by strong competition. Thompson previously said that McDonald’s plans to combat this in party by simplifying its menu so that its restaurants have room to offer options best-suited for their regions. This process is expected to start in January.
One of McDonald’s biggest challenges in the U.S. is long-held perceptions around the freshness and quality of its ingredients. The chain has been fighting to boost sales as people gravitate toward foods they feel are more wholesome. As a result, people have been heading to places like Chipotle, which markets its ingredients as being of superior quality.
McDonald’s has more than 35,000 locations in more than 100 countries.
Its stock gained 89 cents to $95.99 in premarket trading about 20 minutes ahead of the market open.