McDonald's sees fewer customers, sales disappoint

McDonald's reported disappointing sales for its fourth quarter today, as the world's largest hamburger chain saw fewer customers visit its restaurants.
The Oak Brook, Illinois-based company says global sales slipped 0.1 percent at established locations. In the US, where it recently revamped its Dollar Menu to include items that cost a little more, the figure fell 1.4 per cent.
After outperforming its rivals for years, McDonald's Corp. is facing a mix of challenges, including a shift in eating habits toward foods people feel are fresher or healthier. CEO Don Thompson has been working to better reflect those tastes by adding options such as chicken wraps and egg whites for its breakfast sandwiches.

McDonald's is also facing heightened competition from old rivals such as Burger King and Wendy's, and all three chains have been aggressively promoting their value menus to fight for customers.
Analysts have raised concerns that the focus on deals will eat into profit margins. To address that, McDonald's in early November updated its decade-old Dollar Menu; the "Dollar Menu & More" now includes items that cost around USD 2 and USD 5. During the quarter, McDonald's said customers on average spent more per visit. But global comparable sales were dragged down by a decline in guest counts.
In Europe, sales at locations open at least a year rose 1 percent. It fell 2.4 per cent for the unit encompassing Asia, the Middle East and Africa.

For January, CEO Don Thompson says the figure is expected to be flat.

The figure is a key metric because it strips out the volatility of newly opened and closed locations. For the quarter, McDonald's Corp. Earned USD 1.4 billion, or USD 1.40 per share, which is a penny more than Wall Street expected. A year ago, it earned USD 1.39 billion, or USD 1.38 per share.
Revenue rose to USD 7.09 billion, shy of the USD 7.1 billion analysts expected.
The company plans to open between 1,500 and 1,600 new restaurants in 2014, and remodel 1,000 existing locations. It currently has more than 34,000 locations worldwide. Shares of McDonald's Corp. Slipped 13 cents to USD 94.75 in premarket trading.