McDonald’s sales plummet

 

McDonald'sMcDonald’s says global sales fell 3.7 per cent in August, driven lower as the hamburger chain’s Asia-Pacific region sales dropped 14.5 per cent due to a food safety scandal in China.

McDonald’s Corp said earlier this month that it will monitor its suppliers in China more closely after a food safety scandal in the country hurt its sales and reputation.

The announcement came after a TV report in July showed workers at McDonald’s supplier Shanghai Husi Food Co repacking expired meat.

McDonald’s is not the only fast food company to be hurt by food safety concerns in China.

Yum Brands Inc, whose brands include KFC and Pizza Hut, has also stopped using meat from the Shanghai plant and said that its restaurants cut all ties with OSI in China, the US and Australia.

McDonald’s anticipates the China scandal will hurt its third-quarter results by about 15 cents to 20 cents per share compared with its year-ago results.

The Illinois-based company said it will update its 2014 financial guidance when it reports its third quarter results in October.

In the US, sales at established locations in operation at least 13 months declined 2.8 per cent in August.

The figure dipped 0.7 per cent in Europe due to weakness in Russia.

McDonald’s said that soft revenue is expected to pressure its US margin performance in the third quarter.

Aside from dealing with the China food safety scandal, McDonald’s faces increasing competition and shifting eating habits.

The chain is trying to adapt on multiple fronts, including a “Build-Your-Own-Burger” test in Southern California and a new Bacon Clubhouse burger positioned as a premium offering at $US5 or $US6.

AP

Comments

2 comments

  1. Luke R posted on September 10, 2014

    The entire existence of McDonalds has always baffled me. While I admit I haven't tried McDonalds in over 20 years, the taste of the burgers was sub-par compared with virtually any other option and I always get McGurgles after eating one. So not a pleasant experience at all.

  2. Bec posted on September 10, 2014

    It's about time McDonalds start to notice customers expect more from big brands. Using a current example, their complete disregard for animal welfare with their continued use of cage eggs and chickens, is just one of the many hot topics they seem to be ignoring! When you combine this lack of ethics with their messy "restaurants" and plastic food offers, it's difficult to believe they've survived this long!

Comment Manually

Twitter

Deliveroo has launched a new feature that lets users tip the restaurants they order from. It's just one of the ways… https://t.co/YGzJW0eEGM

6 hours ago

More than 70 Aussie fashion brands, including iconic names like Carla Zampatti, have united in a new campaign to en… https://t.co/iNKRJtRAaP

8 hours ago

It's more important than ever to understand your customer right now, argues consumer insights expert Anastasia Lloy… https://t.co/k9YmUO0RxT

1 day ago