McDonald's

Why August Was a Terrible Month for McDonald's

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McDonald's had a rough August – and it isn't the only fast-food chain that's struggling.

On Tuesday, McDonald's announced that its global comparable sales fell 3.7 percent in August. In the U.S., sales dropped 2.8 percent.

However, the biggest blemish on the report was the area that, until recently, had represented a point of growth for the burger chain: Asia/Pacific, Middle East and Africa (APMEA).

Related: McDonald's Tests a 60-Second Drive-Thru Guarantee

APMEA sales decreased 14.5 percent in August, due in large part to the Chinese expired meat scandal. In July, APMEA sales had increased 1.1 percent, driven by strong performance in China. McDonald's predicted that the supplier issue will negatively impact third quarter results by 15 cents to 20 cents per share in comparison to last year's results.

The only bright side for McDonald's – if there is one – is that the burger chain isn't the only company facing these issues. Burger King, Yum Brands and Starbucks were all affected by the Chinese expired meat scandal, with Yum Brands announcing last week that it estimated that same-store sales in China fell about 13 percent in the third quarter from a year ago. In the U.S., fast-food chains across the board are dealing with the largest protests from employees regarding minimum wage yet.

However, while chains with substantial sales in China are basically guaranteed a poor quarter and minimum wage strikes are bad PR for anyone in fast food, at this point McDonald's sales slump is beyond any singular issue. Domestic struggles have plagued McDonald's U.S. same-store sales for months on end, with August marking the fourth straight month of declines. 

Related: Regulator Names McDonald's a 'Joint Employer'

Edition: December 2016

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