Rogue decimal point leads McDonald's to overstate turnover by £130m
A rogue decimal point resulted in McDonald’s UK business overstating its turnover in 2013 by £130m, the fast-food chain has disclosed.
The British subsidiary of the American giant originally posted revenues of almost £1.5bn for the 12 months to the end of December 2013.
However, in the firm’s latest filing with Companies House this week, the group revealed that turnover for the year had actually been £1.37bn.
A spokesman for the business said the mistake had been caused by “a simple human error due to the misplacement of a decimal point” and that the £377.8m gross profit the UK chain had originally reported for 2013 was unaffected.
McDonald’s made the correction in its accounts for 2014, which showed the British business increased turnover last year to £1.43bn. The figure includes sales from company-owned stores and fees and rents from franchisees.
“The improved economic outlook has increased customer confidence which in turn has resulted in improved sales and margins,” the chain said. Pre-tax profits for the year fell to £225.4m from £244.9m in 2013.
Revenues rose despite the business being hurt by the widespread decline in footfall on high-streets, as more people shop online and use out-of-town shopping centres.
McDonald’s said it was attempting to “mitigate” the tougher environment on the high-street by increasing its vouchering.
It has also revamped its menu, renovated sites and is introducing waiter service to make its restaurants more appealing.
The accounts made no mention of the introduction of the National Living Wage, which will result in the hourly rate for all workers aged 25 and over rising to £7.20 in April from £6.70 currently.
The chain is “still working through the detail of the impact” of the increase, the McDonald’s spokeman said. Pubs, restaurants, retailers and coffee chains are all expected to see costs rise in the wake of the higher wage.
The rise in sales at McDonald’s in the UK contrasts with the fortunes of the fast-food giant in the US, where the company has suffered seven consecutives quarters of like-for-like sales declines.
McDonald’s veteran Steve Easterbrook took the helm at the group headquarters in Illinois in March and is tasked with turning the business around. Investors hope that third-quarter results from the company next week will show signs of improvement.