McDonald’s sales continue to drop, but CEO optimistic for future
McDonald’s has posted another quarter of sluggish sales even as the chain amps up its marketing efforts to try and freshen its image.
Source: McDonald's
In the US, same-store sales fell 2 per cent during the second quarter. The company said both its featured products and promotions did not appeal to consumers as much as it had hoped they would, and cited competition as another key problem.
Earlier this year, Steve Easterbrook took the role of chief executive officer and shortly afterwards launched a massive turnaround plan for the chain in an effort to revitalize itself in the face of competition from rivals such as Five Guys and Shake Shack.
Yet positive results from the plan are yet to be seen. Globally, sales at stores that have been open for more than one year decreased 0.7 per cent for quarter, falling below analyst expectations.
The company’s profit for the quarter was $1.2bn, down 13 per cent from last year’s $1.39bn. Revenue dropped 10 per cent to $6.5bn.
However Easterbrook, who hopes to turn McDonald's into a "modern, progressive" burger chain, expects things to look up as the year continues and elements of the new strategy are further implemented.
While the turnaround plan largely focuses on global organizational changes within the company to help improve efficiency, consumer-facing initiatives include menu simplification and all-day breakfast in the US.
"We have made meaningful progress since announcing the initial steps of McDonald's turnaround plan in early May," he said. "I am confident that we will create the transformation necessary for McDonald's to become a modern, progressive burger company delivering a contemporary restaurant experience."
He also said during the company’s earnings phone call that the US will be its lead market for its mobile-ordering app that has yet to launch, although he noted that it will roll out with fairly modest capabilities.