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Consumers still aren’t lovin’ McDonald’s

McDonalds Earnings Rise On Value MenuMcDonalds Earnings Rise On Value Menu

McDonald’s has said it is planning to simplify its menu and revamp its marketing approach, but consumers still aren’t loving the fast-food chain.

The company reported global comparable sales dropped 0.5% in October, as declines were reported in the U.S. and markets abroad. Though the reported declines weren’t as great as analysts had anticipated, McDonald’s (MCD) results were far worse than a year ago, when growth was notched in the U.S. and Europe.

This year, comparable sales slid 1% in the U.S. and fell 0.7% in Europe. Analysts surveyed by Consensus Metrix had expected a 1.9% drop in the U.S. and a 2% decrease in Europe. Europe’s results were stung by “very weak” results in Russia, where McDonald’s has faced pressure from temporary restaurant closures.

Fast-food chains such as McDonald’s are facing pressure in the U.S. and other mature markets as consumers are spending more of their money at fast-casual chains, such as Chipotle (CMG). The rival chains offer menus that consumers perceive to be healthier, as well as fairly quick service that doesn’t require a server. The industry is also challenged by the fact that low-income consumers in the U.S., a group that spends more at fast-food chains, are still facing weak wage growth and poor job prospects.