Germany isn't lovin' McDonald's as sales fall sending share price down 1.3%

The World Cup winners are still punishing the fast food giant for ditching the €1 cheesburger.

by Rachel Savage
Last Updated: 02 Feb 2015

From MT’s July/August issue: McDonald's CEO Jill McDonald: 'McJob is insulting, it really hits my button'

The sheen is coming off those Golden Arches, as enough customers shunned Big Macs in Germany and the US to send net profit down 1% to $1.39bn (£820m) in its latest quarterly results. The fast food giant doesn’t expect to woo back diners any time soon either.

The chain’s global sales rose 1% to $7.18bn in the quarter to June 30, but Wall Street analysts had expected $7.29bn. ‘Same store’ (like-for like) sales fell 1.5% in the US, where there were more than 14,000 Maccy D’s at the end of 2013. It euphemistically blamed ‘ongoing broad-based challenges’ and said it was ‘intent on strengthening the overall customer experience’ – potentially a sign Americans are eating more upmarket as the economy improves.

Asia/ Pacific, Middle East and Africa sales rose 1.1%, but Europe like-for-like revenues fell 1% - pretty dire considering analysts had expected a 0.7% rise. Germany, McDonald’s biggest European market with 1,468 stores, was once again the let down, although France and the UK, the next largest markets, served up ‘solid comparable sales’.

No wonder Jill McDonald, the aptly-named head of McDonald’s across the UK, Scandinavia, Germany and Luxembourg refused to be ‘drawn into a diagnostic on the German situation’, when MT interviewed her recently. The chain’s Europe chief Doug Goare was a little more frank with investors at the end of last year, admitting the Germans were still punishing it for ditching its €1 (79p) cheeseburger in 2012.

McDonald was keen to talk about ‘local relevance’, though. Looks like McDonald’s could use a bit more of that in Deutschland if it’s going to get Germans buying burgers again.

Investor’s aren’t lovin’ McDonald’s either: shares were down 1.3% in mid-morning trading in New York.


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