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article imageBig 'Mc-slump' in global sales reported by McDonald's

By Karen Graham     Dec 8, 2014 in Business
McDonald's Corp. may be the world's largest restaurant chain, but it has not made them immune to declining sales in the U.S. and abroad. Global sales continue to fall for the sixth straight month, taking a toll on its profits this quarter.
Sales for the month of November in the U.S. fell 4.6 percent, double the expected decline while globally, the drop was 2.2 percent. According to Bloomberg Business Week, while analysts had projected a fall of 1.9 percent, the news sent the company's stock down almost 3.7 percent.
McDonald's has more than 14,300 domestic restaurants and is now struggling to keep its head above water with the likes of Burger King, Taco Bell and Chipotle Mexican Grill Inc., as well as other restaurants competing for the public's dollars. The company has also lost its standing as the low-price leader says Will Slabaugh, an analyst at Stephens Inc in Little Rock, Arkansas.
Slabaugh goes on to say, “It's a squeeze that will probably continue for the foreseeable future,” he said. “It puts more caution out there that the changes they’re trying to make aren’t dramatic enough or aren’t moving fast enough -- or both.”
The public, especially the 20-to 30-year-old group, are becoming more selective in their eating habits and how much they are paying for a meal, and many restaurant chains have already keyed into this trend and changed their marketing and menus accordingly. Don Thompson, McDonald's chief executive, said they are working on simplifying their menu as well as changing their marketing tactics. "Today's consumers increasingly demand more choice, convenience and value in their dining-out experience," he said.
But market analysts wonder if this move by the fast-food giant is too little, too late. Thompson said in October that "We haven't been changing at the same rate as our customers' eating-out expectations." He also said that customizing a burger could be a problem, increasing preparation time to as long as five to seven minutes.
Greg Watson, senior vice president of menu innovation, says taking longer than two minutes to prepare a hamburger is going to be too long for most customers. And he points out that preparing a burger based on a customer's choices will make the sandwich more expensive. He wonders if people would be willing to wait longer for a hamburger or shell out more money.
McDonald's also reported a decrease in sales in Europe and Asia. The company is still reeling from the China meat supplier scandal back in the summer. With 35,000 locations in 100 countries, the giant restaurant chain has its work cut out for the company over the next year or so.
McDonald's Corporation - Stock Price and Volume | FindTheBest
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