Business
McDonald's Struggles with Weak Sales Worldwide and Disappoints Investors
McDonald's reports declining sales worldwide, disappointing investors despite positive developments in the domestic market.
The Fast-Food Giant McDonald's Faces Declining Sales Worldwide, Leading to a Disappointing Investor Reaction. In the Third Quarter of 2024, Comparable Revenue Fell by 1.5 Percent Compared to the Same Period Last Year, Double What Analysts Expected. This Decline Is Attributed Mainly to Weak Business in China, France, and the UK, as well as the Ongoing Middle East Conflict and Resulting Boycott Calls. Only in its Home Market Did McDonald's Record a Slight Increase in Sales.
Despite the global challenges, the group's total sales increased by three percent to nearly 6.9 billion US dollars (approximately 6.35 billion euros). However, the operating profit decreased by one percent to about 3.2 billion dollars. In comparison, the competitor YUM! Brands generated a slightly decreased profit of 2.26 billion dollars compared to 2.32 billion in the previous year.
Another setback for McDonald's was the link between illness cases and E. coli bacteria to the consumption of the Quarter Pounder. Consequently, the company precautionarily removed the product from sale in the affected regions. The day before, however, McDonald's announced the reintroduction of the burger to regain customer trust.
Meanwhile, CEO Chris Kempczinski is striving to win back customers with attractive prices and good value for money. A $5 menu in the USA and a similar offer starting at €4.99 in Germany are intended to boost visitor numbers in the restaurants. Despite these measures, the efforts seem to have shown only limited effectiveness so far.
Investors Reacted Disappointedly to the Quarterly Figures, Causing McDonald's Stock to Fall by 0.59 Percent to $295.03 on the NYSE in US Trading. This Decline Reflects Investors' Concerns Over the Ongoing Challenges in the Company's Global Business Environment.
The ongoing problems in key markets such as China, combined with the impact of the Middle East conflict and health incidents, continue to weigh on McDonald's. While the company tries to win back customers with affordable offers, the future remains uncertain as sales performance falls short of expectations.