McDonald’s Reports Disappointing November Sales
- Updated: December 8, 2014
In November, McDonald’s Corporation (NYSE:MCD) sales fell more than expected, disappointing executives and investors alike. In the United States, November sales at established restaurants dropped 4.6 percent, nearly twice as much as the 2.1 percent drop predicted by polled Wall Street analysts.
In Europe, comparable sales fell 2 percent in the month. Globally, same store sales decreased by 2.2 percent, higher than the 1.7 percent decline expected by analysts. McDonald’s shares dropped nearly 3 percent in premarket trading.
Much of the reduction in sales were blamed on stiffer competition in the United States from fast food and fast casual restaurants and a supplier scandal that erupted in China. However, some believe that the drop in sales is an indicator that the chain is failing to resonate with customers who increasingly view McDonald’s options as low quality and unappealing.
While previous generations were happy with assembly line food served within a few minutes of ordering, today’s consumers increasingly want customized options that appear fresh and healthy at a low cost. In recent years, the company has continuously struggled with declining sales, a dropping stock price, and a reduction in customers.
Over the past few years, McDonald’s has tried a number of strategies aimed at increasing sales. McDonald’s recently announced a plan to expand its “Create Your Taste” option to more stores across the United States. The new option allows customers to customize their sandwiches by entering information into a kiosk, reducing the assembly line nature of its products. Nearly anything can be customized using the system, including the type of bun or cheese added to the sandwich.
The program was piloted in four Southern California stores to test customers’ reactions to the service. The first step will be to expand the program to 30 locations in five more states (Illinois, Wisconsin, Georgia, Missouri and Pennsylvania) within the next few months. Then, the company wants to expand the program to 2,000 domestic locations throughout 2015.
McDonald’s is currently the world’s largest restaurant chain by revenue. McDonald’s restaurants generally serve around 27 million customers a day. There are currently about 14,000 McDonald’s restaurants in the United States.
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