McDonald’s sales fell 1.3 percent in the United States in the last three months of 2016, but rose overseas, the company said on Monday.
The Oak Brook, Illinois-based company attributed the internal decline to matching figures from the same period last year when it began offering 24-hour breakfast food. However, the results highlight the challenges facing the fast food chain, at a time when supermarkets are offering prepared food and cheaper ingredients in order to encourage people to eat at home.
McDonald’s is not the only food chain that faces problems in attracting customers. Starbucks executive director Howard Schultz has predicted that the restaurant industry will undergo “seismic” changes as people are making more purchases online, thereby decreasing customers in establishments. Starbucks profits in the United States last quarter fell by 1%.
McDonald’s, for its part, has acknowledged that it is not satisfying the tastes of consumers and that it needs to make a greater effort to become “a modern and innovative hamburger chain.” Recently it started to offer Big Macs of different sizes and in some locations it offers fresh meat in the hamburgers.
Looking ahead to 2017, McDonald’s says it will focus on increasing its clientele.
The decline in sales within the United States ended a five-period run-up, but that increase in revenue may have been due to a price increase or changes in the menu products that people consumed. Overall, by 2016, McDonald’s customers declined by 2.1%, according to documents submitted to the regulatory agency.
This marks, therefore, the fourth consecutive year in which the clientele diminishes at national levels. The company also reduced its location expansions in the United States for the second consecutive year after decades and today has 14,155 branches.
David Palmer, an analyst with RBC Capital Markets, said “McDonald’s sales in the United States could rise this year if the chain’s offerings vary, such as different sizes of Big Macs and combinations with special prices”.
Globally, McDonald’s expanded and has 36,899 locations.