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McDonald’s Sales Drop in January as Asia Drags Down Results

Published on Feb 9 2015 1:03 PM in Food

McDonald’s Sales Drop in January as Asia Drags Down Results

McDonald's, which is replacing its CEO in a bid to reignite growth, posted a worse-than-projected decline in global sales for January, dragged down by a slump at its Asian restaurants.

The sales, which measure locations open at least 13 months, fell 1.8 per cent last month, the company said.

Analysts had estimated a 1.2 per cent decline, according to Consensus Metrix. While US sales narrowly increased, the region that includes Asia, the Middle East and Africa plunged almost 13 per cent.

The results underscore the challenges facing incoming CEO Steve Easterbrook as he charts a new course for the world’s largest fast-food chain. The sales slowdown led to the resignation of McDonald’s current leader, Don Thompson, after less than three years in the job.

"I don’t think we’re going to see a major bounce back this year,” said Darren Tristano, executive vice president at Chicago-based research firm Technomic. "It’s a tough, competitive market."

In Asia, McDonald’s has suffered a series of setbacks, including the rationing of french fries in Japan and a scandal involving a meat supplier. The vendor, Shanghai Husi Food, was accused of repackaging old meat in July, prompting McDonald’s to take products off its menus in the region.

The woes have taken a heavy toll in Japan, where the company lost $186 million in 2014. The company’s sales plunged 39 percent in the country in January, marking the 12th straight month of declines.

In December, McDonald’s was forced to ration fries in the country after a labor dispute at US ports crimped supplies of potatoes. McDonald’s Japan unit also said in December that a human tooth was found in fries and plastic in chicken nuggets.

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