McDonald’s posted a steeper-than-expected drop in quarterly global sales after attempting to entice French and UK customers back to their stores with a value meals drive.
The fast-food chain has been hit by slowing customer visits across the U.S., France, UK, Middle East and China as price-conscious shoppers looked for cheaper meals and cooked more at home.
Global sales for the brand fell 1.5 per cent in the third quarter, the biggest decline in four years, more than twice the size forecast by analysts.
It means that for the second consecutive quarter the conglomerate has recorded a drop in sales – having recorded a 1 per cent slump between April and June – it’s first decline in traffic since 2020 when the pandemic shuttered stores and millions stayed at home.Â
Sales outside America fell 2.1 per cent, driven by weakness in France and Britain, as net profits fell by 3 per cent to $2.3bn.
Overall sluggish demand has prompted fast-food chains such as McDonald’s to lean into meal bundles and limited-time offers in a bid to revive traffic, especially among lower-income customers.Â
The fast-food chain has been hit by slowing customer visits across the U.S., France , UK, Middle East and China as price-conscious shoppers looked for cheaper meals and cooked more at home (file image)Â
Overall sluggish demand has prompted fast-food chains such as McDonald’s to lean into meal bundles and limited-time offers in a bid to revive traffic, especially among lower-income customers (file image)Â
Weaker consumer spending in China and the continues impacts of the Middle East conflict caused sales to dip by 3.5 per cent at McDonald’s restaurants which are operated by local partners.
Western fast-food chains such as McDonald’s and Starbucks have seen boycott campaigns over their perceived pro-Israeli stance and alleged financial ties to Israel.
The move to donate meals to troops was later renounced by McDonald’s franchises in some Muslim countries, highlighting the polarized regional politics that global corporations navigate during war.
The popular chain said it had reached an agreement with franchisee Alonyal for 225 outlets across the country employing 5,000 people.
The decision came after widespread protests at its decision to give out free meals affected sales in the Middle East, Indonesia and France.
Overall sluggish demand has prompted fast-food chains such as McDonald’s to lean into meal bundles and limited-time offers in a bid to revive traffic, especially among lower-income customers.
Customers can choose a cheeseburger or a mayo chicken, plus a medium drink, fries and four chicken nuggets.Â
The popular chain said it had reached an agreement with franchisee Alonyal for 225 outlets across the country employing 5,000 people after it was criticised for giving away thousands of free meals to Israeli soldiers.
McDonald’s have launched a new meal deal offering customers four items for just £5 – available from 11am
Buying these items individually would cost around £7.46, meaning they would save £2.46 with the offer.
McDonald’s CEO Chris Kempczinski said the company was focused on affordability as customers continue to be mindful about spending.
Last week, McDonald’s temporarily paused serving Quarter Pounders in a fifth of its 14,000 U.S. restaurants after an E. coli outbreak infected at least 75 people and killed at least one person.
Slivered onions used in the hamburgers are likely to be the source of the infection, with the Colorado Department of Agriculture over the weekend ruling out beef patties as the possible cause.
Shares declined nearly 7 per cent last week as a result and fell 2 per cent before markets opened on Tuesday, before recovering to trade nearly 1% higher.
The outbreak likely has thrown a near term “monkey wrench” into the U.S. sales recovery when coupled with mixed third-quarter results, Citi analyst Jon Tower said.