Quarter flounder: McDonald's sales continue to fall for 12th straight month

Half eaten Big Mac

The much-heralded McDonald’s turnaround may be working – despite another monthly fall in sales.

On Monday, the fast-food giant revealed that for a 12th straight month, same-restaurant sales around the world were down. The 0.3% drop, however, exceeded expectation. Analysts expected a decline of 0.9%.

The figures were mainly achieved thanks to a 2.3% increase in sales in Europe. In the US, sales continued to drop – restaurants open at least 13 months reported a 2.2% fall.

Starting in July, McDonald’s will stop reporting its sales on monthly basis. The company will issue only quarterly same-restaurant sales, which it believes will better measure performance and allow it to focus on long-term performance.

“The monthly reporting just lends itself to more volatility, and I think investors focus on short-term issues,” Jack Russo, an analyst at Edward Jones and Co, told Bloomberg. “It’s a good move. Quite honestly, it’s kind of long overdue.”

Steve Easterbrook, McDonald’s new chief executive, has introduced a number of changes since he took over in March.

“As we look to shape McDonald’s … as a modern, progressive burger company, our priorities are threefold: driving operational growth, returning excitement to our brand and unlocking financial value,” Easterbrook said last month in announcing the turnaround plan, which includes delivery and an all-day breakfast menu. He went on to say that the company needed a sharper focus on what the customer wanted.

In the US, however, it seems the answer is: “not McDonald’s”. McDonald’s has been losing customers to companies such as Smashburger, Shake Shack and Five Guys. Such burger joints are now looking to expand to the UK.

“The United Kingdom is hungry for better burgers and presents a significant opportunity for us to meet the global demand in the category,” said Scott Crane, Smashburger’s chief executive.

Competition is not the only thing affecting McDonald’s bottom line. McDonald’s workers have spent more than a year campaigning for higher wages as part of the Fight for $15 campaign. Most recently, they have gained the support of the 2016 presidential candidate Hillary Clinton.

“All of you should not have to march in the streets to get a living wage, but thank you for marching in the streets to get that living wage,” Clinton told an audience in Detroit, Michigan on Sunday. “I want to be your champion. I want to fight with you every day.”

Powered by Guardian.co.ukThis article was written by Jana Kasperkevic in New York, for theguardian.com on Monday 8th June 2015 17.18 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010


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