The global downturn has taken a bite out of McDonald’s earnings.
Sales at established McDonald’s stores around the world were flat in July, compared with an increase of 5.1 percent in the same month last year, marking the hamburger chain’s worst performance in nine years, the Associated Press reported.
Analysts had expected the Golden Arches to report growth of 2.3 percent, according to the Wall Street Journal.
The results are even more surprising because McDonald’s only told investors a fortnight ago that it expected sales at restaurants open at least 13 months to be positive, albeit not as strong as the 3.7 percent increase posted in the second quarter, Reuters said.
"It's clear that the consumer is starting to cut back a little," Edward Jones analyst Jack Russo was quoted saying.
McDonald's said sales fell across its major markets, including the United States, Europe, Asia Pacific, Middle East and Africa.
Dow Jones Newswires noted that McDonald’s goes after the budget-conscious crowd so if it is feeling the effects of the global economic downturn then it is likely that other fast-food chains are hurting too.
In an attempt to put a little bit of shine back on those Golden Arches, McDonald’s chief executive Don Thompson said in a statement he was upbeat about the future.
"I am confident that McDonald's will continue to succeed as we execute against our three global priorities of optimizing the menu, modernizing the experience and broadening accessibility to our brand," Thompson said.