McDonald's global same-store sales rise 0.9% in May

McDonald’s Corp. reported a 0.9-percent increase in global same-store sales for May, despite ongoing struggles in many of its major markets, particularly the United States.

McDonald’s system of more than 14,000 locations in the United States logged a 1-percent decrease in same-store sales for the month, marking the fifth month this year without positive growth in that metric. In April, the Oak Brook, Ill.-based chain’s domestic same-store sales were flat, after steadily improving throughout the first quarter.

In January, February and March of 2014, McDonald’s domestic same-store sales declined 3.3 percent, 1.4 percent and 0.6 percent, respectively.

The company said in a statement that it would attempt to stabilize domestic results through improvements to customer service, value and menu initiatives, such as recent promotions around the Dollar Menu & More and its breakfast platform.

McDonald’s faced its most difficult comparison with year-earlier results in the United States in May, as same-store sales rose 2.4 percent in May 2013 on the strength of the nationwide rollout of the Egg White Delight McMuffin and Premium McWraps.

McDonald’s European division reported a 0.4-percent gain in same-store sales in May. Germany dragged on the segment’s performance, as it has for most of the year, the company said, noting that France and the United Kingdom once again picked up the slack.

In a research note, securities analyst Jeffrey Bernstein of Barclays Capital wrote that France and the United Kingdom restaurants’ performance also occurred in a higher-cost environment, as both countries enacted a 3-percent increase to their value-add taxes this year. Bernstein also noted that same-store sales were flat in Russia, the other major market in McDonald’s European division.

In the Asia/Pacific, Middle East and Africa, or APMEA, segment, same-store sales in May rose 2.5 percent, aided in large part by sales recovery in China. That country’s foodservice industry managed through an avian-flu panic and concerns about the supply of poultry in the spring of 2013, and results in 2014 thus far have benefited from comparisons with muted year-earlier sales.

However, McDonald’s disclosed that Japan remains a weak market for the APMEA division. Bernstein noted that Japan’s system reported a 2.4-percent decline in same-store sales for May, while Australia’s performance was “relatively flat.”

In previous public comments, officials for the quick-service chain have noted that the United States, Germany, Japan and Australia were struggling markets that would require extra attention to turn around sales.

McDonald’s operates or franchises more than 35,000 restaurants in more than 100 countries.

Contact Mark Brandau at [email protected].
Follow him on Twitter: @Mark_from_NRN