McDonald’s Corp. posted a worse-than-expected drop in February sales after it encounter fiercer competition in the U.S. market.
The fast-food giant has a new chief executive officer and his mission is to organize a come-back for the company.
McDonald’s reported a that U.S. sales at stores open at least 13 months fell 4 percent in February. The results are worst than estimated, analysts had expected a 0.7 percent drop. Global sales have also decreased by 1.7 percent, compared with a projection of a 0.3 percent.
Steve Easterbrook, a McDonald’s veteran who just took over the company last month, has a difficult task ahead of him. McDonald’s already announced that it will stop serving chicken raised with some antibiotics in U.S. restaurants. The company is also trying to stop the customer “migration” to rivals like Chipotle Mexican Grill Inc. and Panera Bread Co. by revamping it’s business model in the United States.
McDonald’s believes that “consumer preferences and needs have changed” and that it’s main objective is to “evolve and to reset strategic priorities”. McDonald’s stock fell 2.1 percent to $95.13 after the results of the report were released, but the company has 3.7 percent this year through the end of last week.
The situation of McDonald’s in Asia continues to be a poor one, sales in the region dropping 4.4 percent last month. Supply problems and a health scare produced a more severe drop, of almost 13 percent, in January. In Japan, the company was involved in a scandal with a meat supplier and hat to limit its sales of french fries. McDonald’s had to take products off its menus in the region, after one of it’s business partners was accused of repackaging old meat.
After this issues, McDonald’s lost $186 million in the last half of 2014 in Japan only. The company’s sales fell 29 percent during February.
The fast-food giant had better luck on the U.S. market, where it had two consecutive months of positive results – 0.4 percent gains in both December and January -, after 13 straight months without growth.
McDonald’s is revamping its United States operations, trying to bring back customers to its 14,000 restaurants. An increase in the speed of the services is also targeted. McDonald’s wants to expand its Create Your Taste program, a system of sandwich customization, to more restaurants this year.
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