McDonald’s January store sales drop in Asia as U.S. gains

Shrinking Paychecks

In China, McDonald’s January sales were hurt by “consumer sensitivity” around the chicken industry, according to the statement. Yum! Brands Inc., which owns KFC, said its China same-store sales tumbled in the fourth quarter after a former poultry supplier was investigated for selling chicken with high levels of antibiotics.

In the U.S., fast-food eateries are vying for budget- conscious customers who are seeing smaller paychecks. Yum’s Taco Bell is selling new items including loaded grillers and a Cantina Bell steak burrito, while Burger King Worldwide Inc. has recently introduced a molten fudge sundae and new chicken nuggets.

“People’s paychecks have shrunk because of the payroll tax,” Bryan Elliott, an analyst at St. Petersburg, Florida- based Raymond James Financial Inc., said in an interview yesterday. Elliott rates McDonald’s shares market perform.

“I expect that to have a measurable impact on restaurant demand this year,” he said.

Comparable, or same-store, sales are considered an indicator of a company’s growth because they include only older restaurants. McDonald’s December comparable-store sales were unchanged globally.

There are more than 34,000 McDonald’s locations worldwide and about 80% are franchised.

Bloomberg News

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