Consumers Still Aren’t Lovin’ McDonald’s

2 minute read

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 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. 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.

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