On Wednesday McDonald’s declared that the US Sales decreased 2.6% in the first quarter of this year. The food traffic has declined in most of the key global markets. The global profit went down 33%. This is one of the bleakest years in the history of McDonald’s, which faced slow sales all around the world.
The fast food chain has also announced they have a new plan which they will put in practice next month. The plan is expected to turn around the continuous sales decline all over the world. Some changes were already announced by McDonald’s this year. In the US the recipe for grilled chicken will be simplified, the use of antibiotics in chicken will be stopped and in response to the ongoing protests regarding how the company treats its workers, employees who work for company-owned stores will receive a pay raise and vacations.
Steve Easterbrook , McDonald’s CEO, declared that they intend to act as quickly as possible in order to efficiently respond to the needs and expectations of the consumers, but also to the competitive marketplace.
However this may be difficult to achieve since the company is faced with increasing pressure. In the US diners are looking for healthier options and this also leads to bad business for McDonald’s. In Asia the company is not well seen and business has slipped after an incident which involved a supplier accused to have used expired meat. In the area including Asia, Africa and the Middle East sales have dropped 8.3%. In Europe the sales dipped 0.6%.
While McDonald’s struggles with these problems rival companies seem to prosper. Just a day before McDonald’s made its announcement Chipotle Mexican Grill said that their sales recorded a growth of 10.4%. According to their executives the company is on its way to changing how consumers see fast food. Taco Bell sales also grew 6%. This may be a result of the introduction of the breakfast menu.
For now McDonald’s has started piloting a menu which includes all-day breakfast in stores from San Diego. The opinions of analysts regarding this move are divided. The breakfast menu items are very popular and customers have been asking for a long time for prolonged breakfast hours. However McDonald’s already experiences difficulties with an already complex menu. Adding new items to the all-day service could make things worse.
It’s just a matter of time until we will see if Easterbrook’s plan will take McDonald’s in a different direction.
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