McDonald’s has troubling news for its investors. For the first time since 2003, it recorded a 3.7 percent global loss in same store sales. The news only got worse as the company reported an overall disappointing third quarter with a decline in revenues, operating income and earnings per share.
Part of their losses can be attributed to an expired meat scandal which affected China and a handful of other Asian countries. However, this does not explain the 3.3 percent decline in sales here in the U.S.
What this does mean is that the U.S. is no longer “lovin’ it,” but is slowly becoming a more health-conscious nation.
McDonald’s CEO Don Thompson believes the company’s recent dip in sales is due to a failure in advertisement.
“We are diligently working to effectively navigate the current market conditions to regain momentum,” Thompson said in a statement.
Throwing piles of money at advertisers has, in the past, been the most effective method to boost sales. This time an effective marketing campaign might not be enough to get Americans to believe that Olympians and NFL players are fueled by Big Macs.
McDonald’s sales loss can’t be blamed on an overall decline in fast food patronage either. The rate at which Americans are eating fast food has remained relatively unchanged in the past decade, according to a Gallup poll.
Healthier fast food restaurants like Chipotle have stepped in and started to steal some of the McDonald’s business. Unlike the “Golden Arches,” Chipotle reported positive third-quarter numbers with store sales up 19.8 percent and net income up 56.9 percent. This is one of many signs that Americans are starting to care more about their health.
The U.S. as a whole has been making healthier choices. Since 2010, Americans have been consuming 78 less calories every day compared to just five years prior, according to the United State Department of Agriculture report.
Over a third of U.S. adults fell into the obese category in 2009-10, an estimated 15 percent up from 1980, according to the Centers for Disease Control. Since 2012 obesity numbers have not increased compared to the prior year in every state except Arkansas, according to an August 2013 study by two nonprofit groups, according to the Wall Street Journal. In the same month, childhood obesity rates were declining in many states, according to the CDC.
America’s healthier habits might be due to increased public education and awareness. Thanks to federal requirements that force large chain restaurants to post nutritional information about their food, consumers now know how many calories are in their favorite fast food meal.
There’s no escape from the cautionary tales of eating poorly in our entertainment, with the seemingly endless list of food documentaries that keep popping up in your “recommended for you” category on Netflix.
It seems that the U.S.’s slightly healthier approach toward food is here to stay. If that is the case, McDonald’s needs to reconsider their business model or they could begin to lose their tight grasp on the fast food business.