OAK BROOK, Ill. – McDonald’s said Monday that a key sales figure slipped 0.8 per cent in the U.S. last month, as the world’s biggest hamburger chain faced tough competition and flat traffic.
Sales at stores open at least a year is a key gauge of health because it excludes results from stores recently opened or closed. Shares slipped 1.1 per cent Monday.
Globally, the sales figure rose 0.5 per cent in November, the same as in October. The increase was the result of a 1.9 per cent increase in Europe, led by U.K., France and Russia. This was somewhat offset by weakness in Germany.
It declined 2.3 per cent in the region including Asia, the Pacific, the Middle East and Africa mostly because of softness in Japan.
McDonald’s is dealing with 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 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.
The company said Monday that breakfast items, chicken options and the expanded value menu did well in the U.S.
McDonald’s, which has more than 34,000 locations around the world, said the figure includes sales at all restaurants open at least 13 months, including those temporarily closed.
Shares of the Oak Brook, Ill., company fell $1.08 to close at $95.72 Monday. They’re up 8.5 per cent this year.