By Chelsey Dulaney
McDonald's Corp. posted sharper-than-expected sales declines
across all of its divisions in November, as the fast-food giant
continues to struggle with competition and a host of issues across
its business.
Global sales fell 2.2% in November, excluding newly opened
stores, while analysts had expected a 1.7% decline, according to
Consensus Metrix. November's dropoff followed a 0.5% sales slide in
October that beat expectations.
In the U.S., sales fell 4.6% last month, far worse than the 1.9%
drop in sales analysts had projected.
An increasingly complicated menu has slowed service in the U.S.
as McDonald's once-reliable base of younger customers have also
defected to fast-casual chains boasting customized ordering and
fresh ingredients, including Chipotle Mexican Grill Inc., and
specialty-burger chains such as Five Guys.
McDonald's has said it is planning "fundamental changes to its
business" to combat its recent weak performance, seeking to
eliminate layers of management and creating a new organizational
structure in the U.S. as it works to better respond to consumer
tastes.
In the company's Asia/Pacific, Middle East and Africa region,
sales at existing locations fell 4%, missing the 3.8% drop analysts
were expecting. McDonald's performance in the region appears to be
improving somewhat after one of its meat suppliers was accused of
intentionally selling expired meat to restaurants in July. The
scandal shook consumer confidence and has driven down sales in
recent months.
November's decline was a slight improvement over October's 4.2%
sales decline in the region.
In Europe, broader economic softness has been compounded by
political complications in Russia, where authorities have been
inspecting and shutting McDonald's restaurants--moves widely seen
as retaliation for U.S. sanctions in response to Russia's military
incursion in Ukraine.
Sales edged fell 2% in the division in November as "very weak
results" in Russia offset strength in the U.K.. Analysts had
projected a 1.9% decline in the region.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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