McDonald’s Corporation announced this week that sales in the United States fell 4.6 percent, which is the lowest sales month for McDonald’s in over a decade. Global comparable sales also decreased 2.2 percent in November. Performance by segment was as follows:
- United States down 4.6 percent
- Europe down 2 percent
- Asia/Pacific, Middle East and Africa (APMEA) down 4 percent.
“Today’s consumers increasingly demand more choice, convenience, and value in their dining-out experience,” said McDonald’s President and CEO Don Thompson. “We are working to bring the McDonald’s ‘Experience of the Future’ to life for our customers to better deliver against these evolving expectations. Each of our geographic segments is focused on regaining business momentum by prioritizing initiatives to improve comparable sales performance in the near-term, while developing innovations to deliver sustained profitable growth through McDonald’s ‘Experience of the Future.’”
Brand Keys Inc., a brand research consulting firm, conducted a 3,000 consumer national survey that pointed to the ongoing failure of fast-food brands generally, and McDonald’s specifically, to engage consumers–at least not enough consumers to increase same-store sales and profits. “The survey showed that consumers were looking for better service, something an increasingly complicated McDonald’s menu has made increasingly problematic. When brands try to be all things to all consumer, you can do that, but something suffers. In this case, it is service delivery. This is something that McDonald’s has acknowledged in the past, but has not addressed,” said Robert Passikoff, founder and president of Brand Keys Inc.
The Brand Keys consumer survey also raised issues regarding food quality. “Fast food was regarded as ‘edible’ but not much more than that. In the United States, McDonald’s once-reliable base of younger consumers have defected to fast-casual chains because consumers deemed fast casual tastier and healthier with offers ‘of higher quality’ and ingredients that were more ‘trustworthy’ and more customizable that fast food,” Passikoff said.
McDonald’s reported that in November, U.S. comparable sales decreased 4.6 percent amid strong competitive activity. To restore momentum, McDonald’s U.S. said it is working to enhance its marketing, simplify the menu, and implement a more locally driven organizational structure to increase relevance with consumers.
The company also reported that Europe’s comparable sales decreased 2 percent in November as positive performance in the United Kingdom was more than offset by very weak results in Russia and negative results in France and Germany. While the operating environment remains challenging across most of the segment, the company said, McDonald’s Europe remains focused on providing customers with locally relevant value and premium menu options, including differentiated beverage and breakfast offerings.
In November, APMEA’s comparable sales decreased 4 percent, reflecting the ongoing impact of the supplier issue on performance in Japan and China, partly offset by positive performance in Australia. Brand recovery campaigns continue in the markets affected by the supplier issue. To drive customer traffic and improve performance, markets across APMEA are leveraging compelling menu options, value platforms, and the segment’s enhanced convenience initiatives.
Strong comparable sales in McDonald’s Other Countries & Corporate segment, which includes Latin America and Canada, contributed positively to the company’s global comparable sales performance for the month.
