Fish McBites No Balm for McDonald's Sales

Friday, 08 Mar 2013 10:17 AM

 

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McDonald's new Fish McBites failed to hook enough diners to get the fast-food chain's U.S. sales growing in February.

The world's biggest hamburger chain said Friday that a key sales figure was down 3.3 percent in the U.S. for February. It noted that sales in February of last year benefited from an extra day in the leap year. When factoring out that extra day, the company said the figure was flat. That was despite the rollout of the Fish McBites nuggets, which were also offered as the first new Happy Meal entree in a decade.

The struggle to grow at home reflects the mounting pressures on McDonald's, which had managed to pull away from its rivals and thrive even during the Great Recession. Now the Oak Brook, Ill.-based chain is facing a rapidly shifting fast-food industry, with chains such as Chipotle and Panera reshaping customers' expectations.

Traditional competitors such as Burger King, Taco Bell and Wendy's are also revamping their menus and stepping up advertising.

In response, McDonald's has focused on playing up its Dollar Menu and other value items to attract diners. But some analysts have questioned that strategy, saying a reliance on cheaper items will only hurt profit margins. The chain is also increasing its limited-time offers as a way to keep its menu fresh.

McDonald's is also facing tough comparisons because of its past success; U.S. sales rose 11.1 percent in February of last year and 2.7 percent in 2011.

Results in other parts of the world were mixed for February. Globally, McDonald's said sales at established restaurants fell 1.5 percent. When excluding the impact of an extra day, the company said sales rose 1.7 percent.

In Europe, McDonald's said sales were down 0.5 percent or up 2.7 percent when factoring out the extra day from a year ago. The company has been focusing on expanding its breakfast menu and restaurant hours throughout the region, which represents its biggest market by sales.

In the region including Asia Pacific, the Middle East and Africa, the sales figure was down 1.6 percent, or up 1.5 percent when excluding the impact of the calendar shift. Although sales in China and Australia were positive, McDonald's continued to struggle in Japan, where they sank 12 percent at restaurants open at least 13 months.

The figure is a key metric because it strips out the effects of newly opened and closed locations.

McDonald's Corp. hadn't logged a monthly decline in its global sales figure for nearly a decade until this past October. And the figure dropped in January as well, making February the third decline in just five months.

In a statement Friday, CEO Don Thompson, who took the top job last summer, said he was confident McDonald's had the experience to "grow the business for the long term."

The monthly sales figures are a snapshot of money spent on food at both company-owned and franchised restaurants and do not reflect corporate revenue.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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