Euro crisis, China softening take a bite out of McDonald’s

A neon sign at a McDonald's restaurant in Chicago's Wrigleyville neighborhood on April 20, 2009.
(Charles Rex Arbogast / Associated Press)

Even McDonald’s Corp, the world’s largest restaurant chain, isn’t immune to European instability and the slowing Chinese economy.

Citing the “increasingly challenging global economic environment,” the burger behemoth said its same-store sales were up a smaller-than-expected 3.3% globally.

Performance was weak in Japan and in China, where the blistering speed of growth is losing steam and the central bank slashed a key interest rate Thursday.

Also, competitors such as KFC and Pizza Hut owner Yum Brands Inc. have expanded heavily abroad, saturating the fast-food market in some areas.


Across the Asia Pacific, Middle East and Africa sector, McDonald’s said, same-store sales tumbled 1.7%.

In Europe, sales were up 2.9% overall due to strong performance in Britain, France and Russia. But austerity measures hit German consumers hard, pushing down McDonald’s sales for the entire region.

In the U.S., where sales increased 4.4%, new breakfast options such as oatmeal and beverages such as Cherry Berry Chillers provided a boost.

The chain said it made it through the recession with flying colors by staying innovative -- sprucing up stores, offering more healthy options and expanding its product lineup.

But as Chief Executive Jim Skinner prepares to retire this summer, the Golden Arches may be approaching a period of transition.


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