McDonald's Sales Gain Kept in Check by Slack U.S. Demand

McDonald's global sales
Michael Nagle/Bloomberg via Getty Images
OAK BROOK, Ill. -- McDonald's said Monday that a key sales figure rose 0.5 percent in November, even as the world's biggest hamburger chain faced tough competition and basically flat traffic in the U.S.

Its global sales performance was the same as in October. The stock slipped in premarket trading.

Sales at stores open at least a year is a key gauge of health because it excludes results from stores recently opened or closed.

The company said that the metric fell 0.8 percent in the U.S. While breakfast items, chicken options and its new expanded value menu did well, that was pressured by intense competition and flat traffic.

In Europe, it increased 1.9 percent on strong performances in the U.K., France and Russia, which was somewhat offset by weakness in Germany.

Sales declined 2.3 percent in the region including Asia, the Pacific,
the Middle East and Africa mostly because of softness in Japan.

McDonald's (MCD) said that the figure includes sales at all restaurants open at least 13 months, including those temporarily closed.

The lackluster results come as McDonald's faces intensifying competition and changing eating habits. People are increasingly reaching for foods they feel are fresh, healthy or higher quality, with chains such as Chipotle Mexican Grill (CMG) enjoying relatively stronger growth.

To keep pace, McDonald's has introduced options such as chicken wraps and breakfast sandwiches with egg whites. But the company remains a target for health critics, and changing public perceptions about its food won't be easy.

In the meantime, McDonald's is also trying to win over diners with cheaper fare. But its focus on its famous Dollar Menu has been a sore point with franchisees, who are seeing their profit margins hurt as costs for ingredients climb. As such, McDonald's recently revamped the menu as the "Dollar Menu & More," with a range of items costing up to $5. It is not clear yet how the strategy will go over with customers.

McDonald's has more than 34,000 locations around the world.

Shares of the Oak Brook, Ill., company fell 30 cents to $96.50 before the market open.


Increase your money and finance knowledge from home

What are Penny Stocks

The lucrative and dangerous world of penny stocks.

View Course »

Goal Setting

Want to succeed? Then you need goals!

View Course »

Add a Comment

*0 / 3000 Character Maximum