The fast food chain is targeting 700 poor performing restaurants for closing this year, according to a McDonald’s news release in which it reported losses not only in the United States, but in Europe and Asian as well.
First quarter comparable sales in the United States decreased 2.6 percent and operating income for the quarter fell by 11 percent, according to the company. First quarter comparable sales in Europe declined 0.6 percent while operating income tumbled 20 percent.
“APMEA’s first quarter comparable sales decreased 8.3 percent primarily due to the impact of prolonged, broad-based consumer perception issues in Japan, along with negative but improving performance in China,” said McDonald’s about its Asia market. “For the quarter, APMEA’s operating income declined 80 percent … due to strategic restaurant closings and other charges and negative operating performance in Japan and China.”
Bloomberg Business reported that McDonald’s Holding Co. in Japan would likely lose $318 million this year and sales were expected to drop 10 percent. Along with the store closing in Japan, the company had hoped to revamp 2,000 others over the next several years.
McDonald’s Holding president Sarah Casanova said she would take a 20 percent pay cut over the next six months and other directors would take 15 percent salary cuts in the transition as 100 jobs would be lost in Japan.
Time magazine reported that while the 700 store closings is a small percentage of the roughly 32,500 restaurants McDonalds operates globally, it shows that the fast food king is serious about aggressively taking steps about turning around its fortunes and staying No. 1.
“As the world’s leading restaurant company, we are evolving to be more responsive to today’s customer,” said Steve Easterbrook, McDonald’s president, adding that more information will be shared about the restaurants turnaround plans on May 4.
“McDonald’s management team is keenly focused on acting more quickly to better address today’s consumer needs, expectations and the competitive marketplace. We are developing a turnaround plan to improve our performance and deliver enduring profitable growth,” said Easterbrook
- 78We get some strong deflation signs in USA last 3 months, economic numbers not too good only thing rising is debt and consumer confidence.
- 76Coal accounts for approximately 40 percent of all electrical generation on the entire planet. When the price of coal starts to drop, that is a sign that economic activity is slowing down. Just prior to the last financial crisis in 2008, the price of coal shot up dramatically and then…
- 75The price of iron ore has been crashing as well. It is down 35 percent in the last nine months, and David Stockman believes that this is because of a major deflationary crisis that is brewing in China… There is no better measure of the true contraction underway in China…
- 69Half of the 41 fracking companies drilling for shale oil and gas in the US will be dead or sold by year-end amid steep crude price declines, Bloomberg reports. An executive with Weatherford International Plc said slashed spending by oil companies has put much of the US fracking industry at risk.…
- 67(Source : http://qz.com/486476/everything-youve-heard-about-chinas-stock-market-crash-is-wrong/ ) This week’s Chinese stock market implosion has been widely viewed as a reaction to the Chinese government’s devaluing the yuan on Aug. 11—a move many presume was a frenzied bid to lower export prices and strengthen the economy. This interpretation doesn’t stand up to scrutiny. First, Chinese…