McDonald's U.S. Sales Slump Continues
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Between increased competition in the fast-food breakfast space and a menu that may have gotten too complicated for its own good, McDonald's just can't catch a break. And its sales are suffering.
Same-store sales fell 1 percent in the U.S. in May, missing expectations and extending a 6-month slump. McDonald's has not reported a growth in U.S. same-store sales since October. Same-store sales, also called comparable sales, are sales at restaurants that have been open at least 13 months.
McDonald's has fared better internationally, reporting that global comparable sales increased 0.9 percent in May. European sales increased by 0.4 percent and Asia/Pacific, Middle East and Africa rose 2.5 percent. Strong results in China helped boost McDonald's growth in the Asian market, especially in comparison to McDonald's struggles last year due to the impact of the bird flu.
"We are intensifying our commitment to place the customer at the center of everything we do and are determined to create experiences that deliver the most meaningful impact for our customers and our business," said McDonald's CEO Don Thompson in a statement.
McDonald's highlighted its breakfast menu, including McCafe coffee, as a customer-focused growth area for the business. The McCafe concept has potential to help solidify McDonald's position as No. 1 in the fast-food breakfast market as well as edge into Starbucks' domination of the coffee market. But despite corporate enthusiasm for McCafe and aggressive marketing – including two weeks of free McCafe coffee – the concept has yet to boost sales into the positive numbers in the U.S. in 2014.
Earlier this year, McDonald's admitted that it had added too many menu items for its kitchens to keep up with, with some items being too expensive for consumers' wallets. "We overcomplicated the restaurants and didn't give restaurants an opportunity to breathe," the company's chief operating officer said in January. "We need to do fewer products with better execution."