Things keep going from bad to worse at
. The world's largest burger chain posted disappointing
performance on Friday morning with global comparable sales
sliding 2.5% for the month of July.
The chain suffered its sharpest slide in Asia where fears over
a supplier's food safety kept customers away in China. The slide
finds Janney Capital Markets warnings that McDonald's may post
its first full year of global sales decline in 12 years. However,
let's not get too distracted with Mickey D's struggling halfway
around the world. Comps at U.S. stores fell a brutal 3.2% in
McDonald's blames the domestic shortfall, in part, on the
Monopoly promotion that it ran last summer. It countered with the
apparently less popular World Cup prize giveaway this time
around. This would be an acceptable scapegoat if this was a
one-time dip in popularity. It's not. McDonald's has posted
negative stateside comps in each of the past three quarters. In
fact, outside of checking in with
flat sales in April
we've seen the burger giant post comparable sales declines
every single month in this country since October of last
You deserve a break today
McDonald's is trying. It knows that it veered too far from its
value menu roots. The push to go upscale with premium sandwiches,
fancy salads, and high-end coffee and smoothie beverages may have
made sense on paper, but broadening its menu isn't working. Folks
may be spending more, but they're not coming back as often.
Customers also aren't any happier about the quality of its
polled 32,405 subscribers earlier this year on their fast food
experiences. When it comes to burgers, McDonald's ranked dead
last among the 21 leading chains.
McDonald's isn't simply in an out-of-favor niche. Many of its
publicly traded rivals posted positive comps this past quarter.
The Big Mac daddy is in a pickle, and it knows that it's going to
have to claw its way back into consumer acceptance.
On Friday morning its gloomy sales report conceded that its
working on service, value, and menu initiatives. However, it's
been saying this for the past few quarters, and its actions are
falling short on the first two fronts.
McDonald's continues to roll out and promote premium burger
and chicken sandwiches, and even this year's push to get
franchisees to install deeper prep tables is all about giving the
restaurants more ingredients to choose from in assembling
sandwiches. It doesn't take a rocket scientist to realize that
more choices not only slows down service but also increases the
chances of a sandwich assembled incorrectly.
McDonald's coasted for years on the appeal of its value menu
as an all-weather choice for hungry patrons, but now that it has
stumbled in trying to upgrade its value profile it's not going to
be easy to find its way back.
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McDonald's, You're Doing it Wrong
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