McDonald’s takes global sales hit as consumer perceptions prove hard to shake

Toronto Star ^ | February 9, 2015 | AP

[rickmichaels]

OAK BROOK, ILL.—McDonald’s said Monday that a key global sales metric fell 1.8 per cent in January, weighed down by persistent struggles in Japan and China.

The world’s largest hamburger chain said that sales at locations in the Middle East, Africa and the Asia-Pacific region open at least 13 months dropped 12.6 per cent. That showing more than offset a 0.4 per cent rise at U.S. locations and a comparable 0.5 per cent increase in Europe.

McDonald’s shares fell $1.09 to $92.90 in afternoon trading. McDonald’s Corp. said that its performance in the segment that includes the Asia-Pacific region was hurt by broad-based consumer perception issues in Japan as well as the ongoing fallout from a food-safety scandal in China and shift in the timing of the Chinese New Year.

Last year an undercover TV report in China showed one of McDonald’s major suppliers repackaging meat that was alleged to be expired. The claim has not been publicly confirmed by the supplier or the government. The plant stopped operations, and many of McDonald’s restaurants in the country were left unable to sell burgers, chicken nuggets and other items. The chain’s reputation took a hit as well.

Chief Financial Officer Peter Bensen said during a January conference call that McDonald’s estimates it will take at least three to six more months for its business in China to return to a normalized level. The executive said Japan has taken longer to recover. Worsening perceptions are expected to hurt Japan’s results for “the foreseeable future.”

[Opinionated Blowhard]

McDonald’s estimates it will take at least three to six more months for its business in China to return to a normalized level. The executive said Japan has taken longer to recover. Worsening perceptions are expected to hurt Japan’s results for “the foreseeable future.”

So what is McDonald's saying here? That the Chinese care less about safe meat than the Japanese???

[Genoa]

And American media have let it slip that you can get hurt there.

[Mastador1]

A food manufacturer in China doing something unethical, I’m shocked, shocked I tell you! I guess McDonald’s failure was to have a staff of their own inspectors in every corner of the manufacturers facility 24-7? I amazed that anyone in China would be surprised by what food suppliers in their country do.

[2ndDivisionVet]

Colonel Sanders is basically Santa Claus in Japan.

How Colonel Sanders Became Father Christmas in Japan
http://talkingpointsmemo.com/theslice/kfc-christmas-in-japan-colonel-sanders-history-12-23-2014

[Charles Martel]

Japan is a gloriously strange place. Ever seen one of those Cafe’ du Monde coffee & beignet shops (based out of New Orleans)? There are more of them in Japan than in Louisiana.

[Lockbar]

Will McDonalds become the next Radio-Shack? If the rats have their way, yes.

[Dilbert San Diego]

I’m sure there are many other factors as well.

For example, McD faces lots of competition from other places, such as 5 Guys and In and Out. These other places have expanded greatly in recent years. There are only so many burgers to be sold and eaten.

[DoughtyOne]

I’m going to McDonald’s tonight. Can’t wait...

[Star Traveler]

I think I’ll go, too ... :-) ...

[TexasCajun]

...sure the decline isn’t because of slumping tofu burger sales?

[Yo-Yo]

Not a lot of profit margin in paying with Love®

[DoughtyOne]

Hey, if we can do it for Chick Fillet, why not. :^)

[faithhopecharity]

One bite and it’s instant barf. I used to be able to eat mcD and I can still eat Burger King and five guys. There’s something in mcD nowadays. That’s about all I can say. If mcD would remove the new chrmical(s) it could save money and receive my return patronage

[discostu]

It’s got nothing to do with Democrats. McD quite simply has not kept up with the times. America eats better food now, we’re no longer willing to accept that crappy food is the price of speed. McD used to be among the best fastfood burgers without actually being good, now they’re among the worst fastfood burgers without having decreased in quality. The field has changed.

[Cowboy Bob]

Maybe with the retirement of the CEO, mcDonalds will back away from the hip hop, thug culture, and profits will return.

While the hip hop/thug culture may be embraced in the US, it is rejected by most of the world. This would explain the 12% drop in sales.

[grania]

McD has simply not kept up with the times

Agreed. Not all, but a certain percentage of former McD customers would rather have a fresh salsa than the HFCS dyed glop the call ketchup, a freshly prepared sandwich or plate, a pure meat hamburger, whole grains. Fries without the skins are no longer a food product.

Also, except for their dollar menu, McD's is expensive. Two people can share a Chipolte meal, a you-pick-two at Panera, or a DiBella's sub, and have more food and healthier food for less money.

[Dr. Sivana]

For example, McD faces lots of competition from other places, such as 5 Guys and In and Out.

They've had butger competition for the last 50 years. Five Guys is upscale, I've not had the pleasure of trying In and Out.

But McD's has also faced off against Burger King, Wendy's, Hardee's/Carl's Jr./Roy Rogers, Burger Boy, Burger Chef, Gino's, Culver's, Steak'n'Shake, White Castle, Carroll's and endless local mini-chains.

The problem is the beef shortage. High prices/low quality. McDonald's model only works if they can provide decent quality, cleanliness and speed at a rock bottom price. IF they decide to come out with a premium high-markup item, it BETTER be premium (Not ArchDeluxe) , and not interfere with the rest of the menu.I

McDonald's are NOT as clean as they used to be, speed varies from site to site in a way that it didn't before. Ray Kroc would NOT be impressed.

[Steve_Seattle]

"McD quite simply has not kept up with the times. America eats better food now, we’re no longer willing to accept that crappy food is the price of speed. McD used to be among the best fastfood burgers without actually being good, now they’re among the worst fastfood burgers without having decreased in quality. The field has changed."

Apart from the change in the type of fat they use to make their fries, can you support your claims? In my opinion, their burgers taste pretty much like they always have. I think they're still better than Wendy's, Burger King, and Jack In the Box. And I think Five Guys is overrated.

[brooklyn dave]

We know Moochelle won’t let B.H.O. bail out McDonald’s.