McDonald’s Same-Store Sales Drop in January

McDonald’s sales at long-standing restaurants fell in January as problems in Asia overshadowed better-than-expected results in the United States and Europe.

The world’s largest restaurant company is trying to move past 2014’s broad-based sales declines. McDonald’s, based outside Chicago, said last month it would replace CEO Don Thompson with insider Steve Easterbrook in a matter of weeks.

Overall, January same-store sales, or sales at restaurants open at least 13 months, fell 1.8 percent. Analysts, on average, had anticipated a 1.2 percent drop, according to Consensus Metrix.

Systemwide sales, which track sales at all restaurants, fell 7.9 percent, but rose 0.3 percent when stripping out the impact of currency fluctuations.

McDonald’s underscored its need for change in its monthly sales statement, saying its “charge over the coming year is to accelerate the pace of change and elevate the overall McDonald’s experience in the eyes of its customers.”

U.S. same-store sales rose 0.4 percent, just ahead of Wall Street’s forecast for a 0.3 percent gain. January marked the second consecutive month of U.S. same-store-sales growth. U.S. systemwide sales rose 1.3 percent, the only gain in systemwide sales across the company’s three main regions.

In the United States, McDonald’s is rolling out a simplified national menu along with local choices as it tries to win back diners. In January, U.S. breakfast sales were strong, but they weren’t enough to overcome aggressive activity from competitors, the company said.

In Europe, same-store sales rose 0.5 percent, while analysts anticipated a 0.5 percent decline.

Europe’s growth was helped by gains in the United Kingdom and Germany, but sales slumped in France and Russia.

Problems continued in the Asia-Pacific, Middle East and Africa region, where same-store sales plunged 12.6 percent, a steeper drop than the 8.4 percent decline analysts had anticipated.

McDonald’s said the drop stemmed from consumer perception issues in Japan, as well as the lingering impact of a supplier safety issue and a shift in the timing of the Chinese New Year in China and other markets.

This article appeared in print in the February 11th, 2015 edition of Hamodia.