Competition in the restaurant business continues to pressure McDonald’s Corp., which said Friday that its same-store sales fell 0.6 percent globally in April, including a 2.3 percent decline in the U.S.
Year to date, McDonald’s U.S. same-store sales are down 2.5 percent, and its systemwide sales are down 1.6 percent. The 2.5 percent is on top of a 1.3 percent decrease at this time last year, meaning McDonald’s U.S. same-store sales are down 3.5 percent on a two-year basis.
“We are moving quickly to deliver a better experience to our customers, and to realize our vision to become a modern, progressive burger company,” CEO Steve Easterbrook said in a statement. “While our current performance reflects the significant work ahead, I am confident that we’ve taken the first critical steps toward positioning the company for long-term profitable growth.”
McDonald’s sales continue to be weak in numerous markets around the world. In Asia/Pacific Middle East and Africa, or APMEA, the company’s same-store sales fell 3.8 percent in April thanks to continued weakness in Japan, where the company has been hurt badly by consumer perception problems. But that was still the best number in months, as improvement in Australia and other markets offset that weakness.
In Europe, same-store sales increased 1 percent, thanks to improvement in the U.K. and Germany, offset by weakness in France and Russia.
McDonald’s had strong same-store sales in other countries, such as Canada and Latin America, though it didn’t release their specific number.
Year to date, systemwide sales at the company are down 9.1 percent, but excluding currency translation they’re actually up 0.2 percent.
In the U.S., McDonald’s continues to face a tough competitive market as many of the company’s challengers have stepped up their games to take a bite out of the company’s massive market share.
Burger King, in particular, has been strong so far this year, at least in terms of same-store sales. The Miami-based burger chain’s same-store sales rose 6.9 percent in the first quarter, but its largest franchisee, Carrols Restaurant Group, which operates 9 percent of the chain’s U.S. stores, said this week that its same-store sales were up 11.5 percent in April.
Other burger chains like Sonic and Jack in the Box are also taking share as their sales increase. Fast-casual restaurants continue to grow, pizza chains are improving and even convenience stores are increasing their food offerings.
On Monday, Easterbrook announced his turnaround plan, a comprehensive restructuring of the company’s operations that realigns global markets by their levels of development, rather than regions.
The company is also refranchising more restaurants and stripping away levels of bureaucracy at its Oak Brook, Ill., headquarters, in order to enable decisions to be made faster and save $300 million a year in general and administrative costs.
In the U.S., the company is working on a host of efforts to improve sales. It has decentralized its organizational structure to enable regions of the country to introduce unique products. The chain has cut from the menu, is working on technology efforts and is testing different formats that would enable customers to customize their own burgers.
McDonald’s is also testing several types of products and initiatives, including all-day breakfast at some restaurants in San Diego as well as products made with kale, including breakfast bowls and salads. It also reintroduced an old character, the Hamburglar, to advertise the company’s third-pound sirloin burger limited time offer.
Contact Jonathan Maze at [email protected]
Follow him on Twitter at @jonathanmaze
