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McDonald’s U.S. Sales Still Down in May

McDonald's sign
McDonald's sign. photo/bmm

OAK BROOK, Ill. – McDonald's Corporation (NYSE:MCD) today announced that U.S. same restaurant sales for both company and franchised establishments, which have been open at least 13 months, was down 1 percent in May. Its year to date same restaurant sales figure for May was down by even more, 1.2 percent.

McDonald's president and chief executive officer Don Thompson states, "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."

McDonald's is facing fierce competition at home from Wendy's Co, Burger King Worldwide and other eateries that are vying with all the gusto they can muster for a small bite of the Golden Arches.

"Competition and softening sales," blamed one franchisee on poor same store sales in a spring franchisee survey by analyst Mark Kalinowski of Janney Capital Markets. "[There's] no effort to sell McCafe items by McDonald's Corporation. Don't know why," criticized another franchisee in the same survey. "Menu is too large," added another.

Restaurant consultant Richard Adams, who worked for McDonald's Corporation for over 20 years and was once a franchisee, thinks McDonald's needs to change. It needs to increase its guest throughput efficiencies at the store level. "McDonald's domestic sales growth will continue to be restricted by operational complexities and will not improve until the menu is simplified. Management's effort to expand 'customization' will only slow service, make the lines longer, and decrease sales," says the principal of the Franchise-Equity Group consulting firm.

With no gain in the U.S. comparable sales since October of 2013 and a slight loss in the last couple of years, McDonald's CEO says the company will focus on service, value and menu initiatives to improve its sagging fortunes. During May, McDonald's focused its marketing might on the promotion of Dollar Menu & More and its breakfast offerings, including a focus on McDonald's McCafé coffee. 

McDonald's had worldwide comparable sales that were up by 0.9 percent in May. APMEA was the chain's highest performer for the month, with comparable sales up 2.5 percent. That was largely from strong sales in China against last year's softness, brought on by an Avian influenza scare. However, this year's uptick in the Middle Kingdom was partially offset by ongoing weakness of Japan's sales. European sales are emerging from stagnation, up 0.4 percent in May.

U.S. systemwide sales for the month decreased 0.1 percent.


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