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 The fast-food chain, the world's largest by revenue, has struggled
for more than a year to significantly increase those monthly sales,
hindered by slack demand and intense competition for the business of
budget-conscious diners.
November's biggest disappointment came from the United States, where
monthly sales at restaurants open at least 13 months fell 0.8
percent, versus the 0.3 percent gain expected, on average, by 14
analysts polled by Consensus Metrix.
"McDonald's U.S. trends imply a rare period of share losses," RBC
Capital Markets analyst David Palmer said in a client note.
Wall Street initially expected the chain's fortunes to turn this
past spring because its results would be compared with weak monthly
numbers starting in the spring of 2012.
But McDonald's executives recently signaled that weakness would
continue in the fourth quarter amid stiff competition and halting
global economic growth.
Chief Executive Don Thompson, at the helm of McDonald's for more
than a year, has switched top management and shaken up menus to
boost sales and profits. Still, analysts say the chain appears to be
losing out to rivals at all meal times except breakfast — where it
has long been a leader.
Some analysts worry that the company's woes are the result of poor
execution rather than external factors. In particular, they say, new
menu items such as lattes, smoothies, salads and wraps have slowed
McDonald's service in a business where hyper-competitive drive-thru
times are measured in the seconds.
McDonald's latest move was to switch its value-oriented "Dollar
Menu" to the "Dollar Menu & More" with slightly higher price points.
U.S. diners' response to that should show up in the December sales
results.
"McDonald's is still struggling more mightily than their Mighty
Wings," said ITG research analyst Steve West, referring to diners'
lackluster appetite for the company's new chicken wings.
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McDonald's may have to boost promotions to improve sales, he said.
McDonald's, which has roughly seven times the sales of Wendy's Co
<WEN.O> and Burger King Worldwide Inc <BKW.N> combined, has been
slower than those rivals to tempt diners with limited-time specials
and promotions.
Same-restaurant sales in Europe, which just edges out the United
States as the top generator of revenue, rose a higher-than-expected
1.9 percent, with weakness in Germany more than offset by strength
in the UK, France and Russia.
But declines in Japan weighed on comparable sales in the Asia
Pacific, the Middle East and Africa region, which fell 2.3 percent.
Analysts, on average, estimated a 0.7 percent decline. Sales in
Japan have been weak for the past seven months.
Shares of the Oakbrook, Illinois-based company were down 1.1 percent
$95.73 in midday trading.
(Reporting by Siddharth Cavale in
Bangalore and Lisa Baertlein in Los Angeles; editing by Saumyadeb
Chakrabarty, Jeffrey Benkoe and Steve Orlofsky)
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