McDonald's global sales drop in February, US declines 4 per cent

NEW YORK, N.Y. – McDonald’s says global sales declined again in February, including a 4 per cent drop in the U.S. where it is fighting to reinvigorate its image.

The world’s biggest hamburger chain has been struggling to hold onto customers amid shifting tastes and intensifying competition, including a slew of places that position themselves as more wholesome alternatives. In a statement Monday, McDonald’s conceded “consumer needs and preferences have changed” and that its recent performance shows it needs to evolve.

Going forward, it said its goal would be to “reassert McDonald’s as a modern, progressive burger company.”

Already, McDonald’s has been signalling that changes are on the way. In January, it said CEO Don Thompson would step down and be replaced by Steve Easterbrook, its chief brand officer.

That change took effect at the start of March and coincided with a “Turnaround Summit” for U.S. franchisees in Las Vegas last week, which the company said was designed to give “renewed energy and focus” to restaurant operations.

For February, McDonald’s blamed the sales decline in the U.S. on “ongoing aggressive competitive activity.”

The drop at established locations came despite a promotion that let randomly selected customers pay with acts of “loving,” such as a fist bump or hug. The two-week promotion was part of a new advertising push that tries to link McDonald’s with the positive emotion of loving, rather than focusing too heavily on deals.

One change some customers in the U.S. could see relatively soon is an option that lets them build their own burgers by tapping a touch screen. McDonald’s has said it plans to roll out that “Create Your Taste” program to as many as 2,000 restaurants this year. The program is part of the focus on giving people greater flexibility to customize their orders, which executives say is increasingly valued by customers.

On ingredients, McDonald’s also said last week it would limit the use of antibiotics in chicken within the next two years. Executives have also hinted that the company might simplify recipes to remove preservatives in some items.

In the division including Asia, the Middle East and Africa, McDonald’s said sales fell 4.4 per cent in February. The company’s reputation has suffered particularly in Japan, where customers have reported finding various objects in their food. In China, McDonald’s is trying to recover over a food quality scandal involving a major supplier.

Sales edged up 0.7 per cent in Europe for the month.

Overall, McDonald’s says global sales fell 1.7 per cent at established locations in February when including other regions the company doesn’t break out.

McDonald’s, based in Oak Brook, Illinois, has more than 36,000 locations around the world. Its shares slipped about 1 per cent to $96.19 in premarket trading.


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