News

McDonald's blames negative October US sales on competition

November 10, 2014

McDonald's continued its sales slide in October, this time across all of its global markets. Global comp sales were down 0.5 percent in October, with segments broken down as follows:

• US down 1.0 percent
• Europe down  0.7 percentAsia/Pacific, M
• Middle East and Africa down 4.2 percent

"Although October results reflect our current business challenges, we are moving with a sense of urgency to improve the trajectory of our financial performance while taking the actions necessary to pursue the brand's long-term potential," CEO Don Thompson said in a news release.

He said consumers now prefer customizable food, contemporary atmospheres and convenient ways to order and pay for their meals. These elements are the focus of the new McDonald's Experience of the Future initiative. 

In the US, the company cited "strong competitive activity" as a reason for negative sales. The system is revamping its marketing approach, simplifying the menu and creating a new organizational structure, according to the release.

Europe's comparable sales decreased as a solid performance in the UK was more than offset by weak results in Russia, including temporary restaurant closures. These factors, along with the significant weakening of the euro and Russian ruble, negatively impacted the segment's reported systemwide sales, the company said.

APMEA's comp sales remained challenged by the supply chain issue in July that affected Japan and China business. This was partly offset by a strong performance in Australia. The company said the markets affected by the supply chain news are executing "multi-faceted initiatives to restore customer trust."

The company also added that it turned in strong sales in its "Other Countries & Corporate segment," which includes Canada and Latin America.

Systemwide sales for the month decreased 3.4 percent, or increased 1.9 percent in constant currencies.