McDonald’s Falters With Poor Quarterly Growth

Fast food conglomerate McDonald’s has today reported weaker than expected quarterly sales figures, reflecting a growth in profits of just 3% over the last quarter of 2007 following a slumping in US sales, which was lifted by strong performance in other global markets.

Over the last quarter to December, McDonald’s reported an increase in net profit from $1.24 billion (in 2006) to just $1.27 billion, reflecting a definite slowing trend throughout its company. Additionally new store sales in the US were paltry, coming in at just a 3.3% increase whereas European performance far outstripped double figure growth for the year.

And with inflation factored in as a consideration, McDonald’s results appear even less appealing throughout its US divisions, after what the company has described as ’softer’ consumer spending trends. Additionally, when factoring in a substantial tax gain enjoyed during the period, the results become even less spectacular.

Despite the poor results, McDonald’s has said that it will continue to push for growth and promote the development of its US offerings, with particular emphasis on the breakfast market which it sees as being a potentially lucrative proposition for increasing profitability.

The announcements make McDonald’s the latest victim of the credit crunch and the sub-prime fallout, which many are now predicting could lead to a recession over the course of 2008, which could have devastating effects on the global economy and international business.

Whilst the US division has been hit by a depression in consumer spending, revenues across the board increased by a more respectable 6% to $5.8 billion, highlighting that the trend of more conservative consumer spending may not as of yet fully reached European shores.

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