Wednesday 7 December 2016

McDonald's profits down 13% as US customers decline

Published 23/07/2015 | 15:02

Bid to block McDonald’s near schools fails
Bid to block McDonald’s near schools fails

A fall in customers at its US restaurants contributed to a 13% decline in profits at McDonald's over the second quarter of this year.

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The world's biggest burger chain said sales fell 2% at established US locations, as featured menu offerings and promotions failed to live up to expectations against competitors.

The sales figure rose 1.2% in Europe and fell 4.5% in the segment including Asia, the Middle East and Africa. On a global basis, the figure was down 0.7%.

Looking ahead, CEO Steve Easterbrook said the company is seeing early signs of momentum and that global sales at established locations are expected to be positive in the third quarter.

McDonald's, which has more than 36,000 locations around the world, is trying to regain its footing after seeing its profit sink 15% last year.

In the US, the company is up against changing eating habits and intense competition. Last week, Yum Brands said Taco Bell sales at established locations rose 6% for the quarter. The same figure rose 4.3% at burrito chain Chipotle and 2.9% at Dunkin' Donuts.

McDonald's has admitted it created some of its own problems, such as letting its menu get too complicated. That affected waiting times and order accuracy.

To adapt, McDonald's is looking at ways to make its menu more flexible, such as serving popular breakfast items all day and letting people build their own burgers by tapping a touchscreen.

It is also trying to improve perceptions about the quality of its ingredients, and started a campaign last year inviting people to ask questions about its food.

For the quarter to June 30, the company earned 1.2 billion US dollars (£771 million).

A year ago, the company earned 1.39 billion US dollars (£893 million).

Total revenue was 6.5 billion US dollars (£4.17 billion) ahead of the 6.45 billion US dollars (£4.15 billion) Wall Street expected.

Press Association

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