McDonald's suffers drop in sales

McDonald's suffers drop in sales after losing business to other food chains. Its rebound plan fails to deliver the desired results, focusing more on popular regional menu items.

McDonald's Corp registered drop in sales owing to increased competition in the fast food segment. Despite its promotions and turnaround plan, the US sales fell more than projections. After taking charge as CEO on March 1, McDonald's Chief Executive Steve Easterbrook has charted a turnaround plan to promote sales volume.

However, the fast food giant suffered 10% drop in sales and earnings per share (EPS) for the first quarter. McDonald's has been suffering from poor business performance that eventually led its former CEO Don Thompson to exit the company.

While calling the results as disappointing, Easterbrook forecasts revival of business in the next quarter. He said: "The company is seeking early signs of momentum and a sales rebound in the third quarter."

Wall Street and customers are keen to know more details about the company's revival plan, reports CNN Money.

McDonald's observed that its product range and promotions couldn't evoke the customers' response and failed to bring the desired results.

Agreeing to the fact that sales were declining for the last three years, Easterbrook remarked, "There's no silver bullet. No one move will turn a business".

McDonald's will focusing more on revitalizing its core menu. While new product launches will happen, it will not going to be the main priority. Easterbrook said customers should expect "more regional menu items such as popular lobster roll in Boston".

He also observed that many restaurants have adopted new cooking methods such as toasting the hamburger buns longer and changing how meat is seared and heated up. Customers prefer hotter and juicier sandwiches, he said.

Easterbrook's turnaround plan implemented from May had promised a lot to customers with phrases like "modern progressive burger company," but it couldn't get the anticipated positive response from the market.

Market observers feel that McDonald's has to work hard to impress upon customers and investors on how its new strategy will bring in the results. After releasing its sales results, the stock fell 0.5% and it recorded a 3% growth during the year.