Sales down 1.7% worldwide and down 4% in US restaurants as new CEO Steve Easterbrook says consumer preferences herald an 'urgent need to evolve'
McDonald's has announced an "urgent need to evolve" after unveiling another slide in worldwide sales, the ninth month in a row that sales have fallen at the fast-food chain.
The slip came amid a new advertising campaign that allowed customers to "pay with lovin'". Worldwide sales fell 1.7%, where analysts polled by Consensus Metrix had been expecting a 0.3% decline. In the US, sales at restaurants open at least 13 months slipped 4% in February, after growing 0.4% in each of the two prior months.
"Creating consistently relevant and satisfying customer experiences have been hallmarks of McDonald's business and historic success," the company said in a statement.
"However, consumer needs and preferences have changed, and McDonald's current performance reflects the urgent need to evolve with today's consumers, reset strategic priorities and restore business momentum. The goal going forward is to be a true destination of choice around the world and reassert McDonald's as a modern, progressive burger company."
The disappointing results come just a week after McDonald's appointed a new chief executive, Steve Easterbrook, to run the struggling chain. The British executive is a long-term McDonald's insider who left the company in 2011 to run two UK chains, PizzaExpress and Wagamama, before being hired back in 2013.
Easterbrook has promised a major turnaround at the US company which has been losing sales amid vicious price wars with rivals Burger King and Wendy's and rising sales at other chains like Chipotle, Five Guys Burgers and Panera Bread. In the US, McDonald's blamed the sales decline in February on "ongoing aggressive competitive activity".
The drop followed a US promotion that let randomly selected customers "pay with lovin'", such as asking someone to dance, or giving someone a fist bump or hug. The heavily advertised promotion failed to boost sales.
The company held a "turnaround summit" for franchisees in Las Vegas last week, which it said was designed to "deliver renewed energy and focus" around the restaurant experience.
Sales in the Asia-Pacific, Middle East and Africa region fell 4.4% and appear to still be suffering from the impact of two food scandals. In January, a customer in Japan found a piece of vinyl in a chicken nugget; last summer one of McDonald's Chinese meat suppliers was accused of selling expired meat to restaurants.
Europe provided some relief for the company. Same-store sales rose 0.7% in the region, with strong performance in the UK and Germany offsetting weakness in Russia. The increase came after a 0.5% uptick in sales in January.
Easterbrook told analysts recently that McDonald's had been "typically a risk-averse company" but that "time doesn't allow you to do that when you are in a turnaround. We try to add some pace and add some agility."
Last week the company announced it would stop selling chicken treated with antibiotics used on humans. The move followed pressure from US government bodies and others who fear the practice is contributing to the rise in antibiotic-resistant infections. Chipotle, Shake Shack and other chains have already banned the use of such antibiotics, but McDonald's scale means the decision is likely to reshape the supply chain.
The arches are not so golden these days, with sales at the fast-food giant down worldwide for a ninth straight month. Photograph: Ruaridh Stewart/Zuma Press/Corbis
