Food Scandals in Japan, China Hurt McDonald's Sales
Marcel Woo | | Mar 09, 2015 10:34 AM EDT |
A McDonald's restaurant is pictured in Encinitas, California September 9, 2014. Fast-food-loving customers seemed to have turned their backs on McDonald’s last February as the burger company’s global sales fell steeper than what was expected, thanks to food scandals in Japan and China. REUTERS/Mike Blake
Fast-food-loving customers seemed to have turned their back on McDonald's last February as the burger company's global sales fell steeper than what was expected, thanks to food scandals in Japan and China.
Sales in the US and Asia-Pacific fell 4 percent and 4.4 percent, respectively in February, adding to evidence that the world's biggest hamburger chain is struggling to keep customers despite shifting tastes and cutthroat competition.
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In the division including Asia, Africa and the Middle East, McDonald's reported sales drop of 4.4 percent in February. The figure, however, did not come as a surprise considering that the company's reputation in Japan suffered bigtime after customers reported finding various objects in their food.
McDonald's has also not fully recovered in China, where a food quality scandal involving a major supplier made Chinese consumers think twice before ordering McNuggets or McBurger.
In the US, McDonald's blamed aggressive competitive activity for its poor performance in its biggest market. The company, however, vowed to take action that will "deliver renewed energy and focus around the elements of the restaurant experience that matters most to customers".
Europe was an exception, as sales in the UK and Germany rose 0.7%, although sales also dropped in Russia as the company was put under investigation by the consumer protection agency and is now the focus of dozens of court cases.
"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 company said.
Going forward, it said its goal would be to "reassert McDonald's as a modern, progressive burger company."
One of the major changes occurred in January, when McDonald's announced that CEO Don Thompson would step down and be replaced by Steve Easterbook, its chief brand officer.
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