Fast food chain, McDonald’s Corp’s (MCD.N) sales at established U.S. restaurants slumped for the first time in six quarters as it failed to overcome competition from supermarkets and other retailers.
Shares of McDonald’s crashed as much as 2 percent after the operator of the world’s largest fast-food CHAIN reported fourth-quarter results on Monday. The stock later rebounded somewhat to trade down 0.9 percent at $121.18.
McDonald’s and other restaurant operators are battling broad-based competition for consumer food dollars. Their rivals include convenience stores, supermarkets and meal kit delivery services such as Blue Apron.
The challenge from grocers has been particularly daunting. Supermarkets have been passing lower food costs on to shoppers, while restaurants are raising prices to offset the impact of minimum wage increases.
“Entering 2017, McDonald’s U.S. will continue to focus on growing guest traffic,” the company said in a statement.
Traffic has fallen more than 10 percent over the last four years at restaurants in the United States, McDonald’s most profitable market, according to a client note from RBC Capital Markets analyst David Palmer.
Sales at McDonald’s restaurants open at least 13 months fell 1.3 percent in the fourth quarter, squeaking by analysts’ estimates of a 1.4 percent drop compiled by research firm Consensus Metric.
Results from international markets also beat analysts’ expectations due to strength at restaurants in the UK, China, Japan and certain markets in Latin America.
Sales did benefit, which made year-earlier comparisons in the latest quarter difficult, McDonald’s said in a statement on Monday, January 23, Reuters reports.
McDonald’s fourth-quarter revenue fell nearly 5 percent to $6.03 billion, mainly due to the sale of restaurants to franchisees as part of Easterbrook’s turnaround plan.
