McDonald’s suffers new blow as global sales fall

McDonald’s has pledged to win back American customers with its $5 meal deal after it temporarily withdrew sales of Quarter Pounder burgers amid an E. coli outbreak.
The fast food chain’s global sales fell 1.5 per cent in the three months to the end of September, the biggest decline in four years.
Last week the company was forced to temporarily suspend sales of Quarter Pounders in a fifth of its US restaurants after they were linked to an E. coli outbreak that has killed at least one person. Slivered onions used in the burgers are suspected of being the source of the infection.
Chris Kempczinski, chief executive of McDonald’s, said the company hoped to get the momentum back in its sales after the incident, using a variety of strategies, including extending the $5 meal deal until December at most US stores. The deal was introduced in June to target a decline in sales among its lowest-earning customers, who have been struggling with higher living costs.
Kempczinski, 56, said: “I think certainly we’re seeing success with the $5 meal deal. We’re going to have food innovation as well in Q4. We’re going to continue to be driving digital and I think we stand ready to do more if we need to.”
He said he was “very sorry” if someone became ill at a McDonald’s restaurant after eating an onion used in its burgers.
“I am relieved that I think we are now past this and on the road to getting back to serving our customers as we are used to doing,” he told analysts on an earnings call on Tuesday.
In the three months to the end of September, US comparable sales rose 0.3 per cent, aided by promotions. International sales fell 2.1 per cent, driven by weakness in the UK and France.
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McDonald’s said it increased traction with low-income consumers during the quarter for the first time in more than a year. In the UK it has introduced a “3 for £3” menu including burgers and a Mini Mcflurry.
Weaker consumer spending in China and disruption caused by the Middle East conflict weighed on sales at restaurants operated by local partners.
Ian Borden, chief financial officer at McDonald’s, said: “We acknowledge that our performance so far this year has fallen short of expectations, with negative global comp [comparable] sales for the quarter amid a challenging industry environment. However, US comp sales were positive for the third quarter, which was driven by taking action on what we can control, providing compelling generating menu excitement and using the full power of our marketing.”
He added: “The industry environment remains challenging … I think consumers are under pressure.”
McDonald’s shares were flat in early afternoon trading in New York.