Fast food giants McDonald on Friday reported its worst monthly calendar-adjusted global same-store sales since early 2003 as it deals with a meat-supplier scandal in China and continued weakness in the U.S.
Global sales fell 2.5% in July, far worse than expected. The steepest drop came in its Asia/Pacific, Middle East and Africa region, where sales at existing locations slumped 7.3% last month. Analysts expected a 0.5% drop in that region.
The bigger problem for the company is continued weakness in the U.S., its largest market in terms of restaurants. For July, McDonald’s reported the ninth consecutive month of negative or flat same-store sales growth in the U.S.?its longest stretch without growth in its core market since 2003.
The world’s biggest restaurant chain and its chief executive of the past two years, Don Thompson, are currently wrestling with significant challenges on multiple fronts. McDonald’s has lost sales momentum over the past year in its home market as U.S. consumers defect to fast food rivals such as Chipotle, Burger King.
Also last month, McDonald’s suffered a major setback in China, which had been a bright spot for its global growth, when authorities accused a supplier of selling expired meat to McDonald’s and other fast-food outlets. The meat, from Shanghai Husi Food Co., a subsidiary of longtime McDonald’s supplier OSI Group Inc. of the U.S., had been sold to restaurants in China, Japan and other markets that account for approximately 10% of global systemwide sales.
Source; PER SECOND NEWS
