McDonald's October sales fall not as steep as expected

Mon Nov 10, 2014 11:19am EST
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(Reuters) - McDonald's Corp's (MCD.N: Quote) restaurant sales fell less than expected in October, the company said on Monday, but worries linger as it searches for the right recipe to compete with popular chains selling fresh made-to-order food.

Worldwide sales at restaurants open at least 13 months were down 0.5 percent as the world's biggest fast-food chain continued to fight tough U.S. competition, the after-effects of a supplier scandal in Asia, and economic and political turmoil in Europe.

Analysts expected a 2.2 percent decline, according to research firm Consensus Metrix.

Same-restaurant sales fell 1 percent in the United States, less than the 1.9 percent decline analysts expected. Such sales have not increased at McDonald's since October 2013.

Under Chief Executive Officer Don Thompson, who took the helm in July 2012, the U.S. operation is focusing on fresh ingredients and custom sandwich toppings as it seeks to compete more effectively with popular chains like Chipotle Mexican Grill Inc (CMG.N: Quote) and Subway, where diners pick the ingredients that go into their meals.

The Golden Arches also is giving restaurant operators more control over what they put on their menus and is expanding ordering to mobile devices and kiosks.

The company's shares were unchanged at $95.10 in early trading.

The changes come as McDonald's also struggles to get a leg up on smaller and more-nimble rivals such as Wendy's Co (WEN.O: Quote), Burger King Worldwide Inc BKW.N, In-N-Out Burger and Chick-fil-A.

"Market share declines continue to be an issue in major markets," Stern Agee analyst Lynne Collier said in a client note.   Continued...

A McDonald's restaurant is pictured in Encinitas, California September 9, 2014. REUTERS/Mike Blake