McDonald’s sales fall again amid weakness in Asia
By CANDICE CHOI AP Food Industry Writer February 8, 2013 7:50AM
Updated: February 16, 2013 5:02PM
NEW YORK — McDonald’s says a key sales figure dropped again in January as the world’s biggest hamburger chain struggled with ongoing weakness in Japan and supply chain issues in China.
The Oak Brook, Ill.-based company said global sales at restaurants open at least 13 months dropped 1.9 percent for the month. The figure is a key metric because it strips out the volatility of newly opened and closed locations.
After years of outperforming rivals, McDonald’s has been struggling amid intensifying competition and challenging economic conditions around the world. Late last year, the company ousted the head of its U.S. business after the sales figure dropped for the first time in nearly a decade. CEO Don Thompson, who took the top spot this summer, has vowed to add business by focusing on value while planning a series of new limited-time offers to attract customers.
But Thompson also warned last month that sales were trending negative for January.
In the region encompassing Asia, the Middle East and Africa, McDonald’s said its sales sank 9.5 percent in January. McDonald’s has been struggling in Japan, where it says customers have been eating at home more often since the earthquake and tsunami in 2011.
In China, the company said the timing of Chinese New Year hurt results. But another factor was the ongoing wariness among diners after reports on Chinese television that chicken producers were ignoring regulators and giving the birds unapproved levels of antibiotics. Yum Brands, which owns KFC and is the biggest Western chain in the country, has been slammed by the reports. Yum expects its sales in China to fall by 25 percent in the first quarter.
In Europe, McDonald’s biggest market, sales fell 2.1 percent as Germany and France dragged down results. The company said it remains focused on enhanced value and keeping stores open longer in the region.
In the U.S., McDonald’s said the figure edged up 0.9 percent. The addition of the Grilled Onion Cheddar burger to the Dollar Menu boosted results.
McDonald’s shares were down 10 cents at $94.53 in premarket trading.