The world’s biggest hamburger chain’s sales at established US locations fell 1.7 percent in the first quarter as guest counts fell, McDonald’s said yesterday. The company also saw customer counts decline last year as it struggled to manage an array of new menu items and fend off intensifying competition.
Chief executive Don Thompson conceded earlier this year that McDonald’s had lost some of its “customer relevance” and that it needed to do a better job of underscoring value and service. Yesterday, the company attributed its US sales performance in the latest quarter to “challenging industry dynamics and severe winter”.
The drop was offset by stronger results in Europe, which pushed up global sales at established locations by 0.5 percent. Profit for the first quarter of the year fell and missed Wall Street expectations.
The company said global sales for this month were expected to be modestly positive.
The drop in US customers and sales reflect the struggles McDonald’s faces as people flock to chains that offer higher-quality alternatives to traditional fast food. Chipotle said last week that sales rose 13.4 percent at established locations.
Thompson said McDonald’s would focus on value for its more cash-strapped customers, but the chain was also offering more premium items.
To adapt to shifting trends, McDonald’s has also been rolling out new prep tables in its US kitchens that can hold more sauces and toppings.
The idea is to eventually offer greater customisation on its menu while keeping orders easy to assemble for workers. Speed and accuracy have been an issue for McDonald’s as it stepped up the pace of new menu items in the past year.
Net income for the quarter fell to $1.2 billion (R12.6bn), from $1.27bn a year ago.