McDonald's tries to lure back customers

McDonald's isn't lovin' it. After it reported lower sales and profit figures Friday, the beleaguered chain pledged to take action this year to save money and bring customers back.

Sales and profits fall at world's largest burger chain

The world's biggest hamburger chain is struggling to beat back competition and adapt to changing eating habits. (Gene Puskar/Associated Press)

McDonald's isn't lovin' it, and it's going to do something about it.

The world's largest hamburger chain reported falling earnings and sales for its fourth quarter on Friday and says it is going to take action this year to save money and bring customers back. This includes slowing down new restaurant openings in some markets.

An important sales measure fell in all of McDonald's major markets because of economic uncertainty, a food-safety scandal in China and the changing tastes of diners.

Chief financial officer Peter Bensen said in a statement that McDonald's has a 2015 capital expenditure plan of about $2 billion US and is targeting fewer restaurant openings in its most challenged markets.

"We believe this lower level of capital spending is prudent while we work to regain our business momentum and improve the sales and profitability at our more than 36,000 restaurants around the world," he said.

McDonald's operates more than 1,400 restaurants in Canada.

Fighting negative perceptions 

For the period ended Dec. 31, McDonald's earned $1.1 billion US, or $1.13 per share. That compares with $1.4 billion, or $1.40 per share, a year earlier.

Revenue fell to $6.57 billion US from $7.09 billion.

Sales at locations open at least 13 months edged down 0.9 per cent on weaker traffic. In the U.S., the metric declined 1.7 per cent on fewer customer visits, tough competition and increased expenses.

Since late 2012, McDonald's has twice replaced the president of its flagship U.S. division while fighting to hold onto customers. The company is dealing with competition on a number of fronts, including convenience stores that are selling more food and smaller chains such as Chipotle that market themselves as being of higher quality.

In hopes of changing negative perceptions about its food, McDonald's recently invited customers to ask questions about its ingredients and sourcing. It also launched a new marketing campaign intended to play up the "loving" in its "I'm Lovin' It" slogan and associate its name with that positive emotion.

The company is also trying to simplify its menu, and offer people greater flexibility in customizing orders. It plans to offer an option that lets people build their own burgers on a touchscreen in 2,000 of its 14,000 U.S. restaurants sometime this year.

McDonald's is also simplifying its menu and focusing more on local tastes to bring customers back.


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