McDonald’s Corporation’s sales at established US restaurants fell for the first time in six quarters as the novelty of all-day breakfast failed to overcome competition from supermarkets and other retailers.
Shares of McDonald’s fell as much as 2 per cent 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 per cent 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.
Lower food costs
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 US will continue to focus on growing guest traffic,” the company said in a statement.
Traffic has fallen more than 10 per cent 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 per cent in the fourth quarter. McDonald’s fourth-quarter revenue fell nearly 5 per cent to $6.03 billion.
