McDonald’s suffers first monthly sales fall since 2003

McDonald’s has suffered its first drop in monthly sales in almost a decade, as the world’s largest fast-food chain battles a fragile global economy and fierce competition.

Sales at its outlets open at least a year tumbled 1.8pc in October, with the US reporting a much steeper decline than had been forecast. McDonald’s also saw sales slide 2.2pc in Europe and 2.4pc in Asia, Africa and the Middle East.

The US, still its largest market, poses the biggest headache. Sales were 2.2pc lower last month compared with a year earlier, double the drop that had been expected.

Besides the lacklustre economic recovery in the US, rivals such as Burger King, Wendy’s and Taco Bell have sharpened their efforts to take market share. After refurbishing its restaurants and revamping its menu, Wendy’s saw US sales climb 2.7pc in the third quarter. Taco Bell launched an aggressive advertising campaign, while Burger King has shaken up its menu with new items including a gingerbread cookie milkshake.

Donald Thompson, who took over as chief executive of McDonald’s from Jim Skinner earlier this year, admitted that in America the company had seen “modest consumer demand and heightened competitive activity”.

Analysts said the fast-food chain was likely to respond to its first drop in global sales since 2003 with a blitz of promotions. McDonald’s loss of market share “seems to have accelerated in recent months”, said Andy Barish, an analyst at Jefferies.

In the US, however, those efforts may be stymied as consumers in New York and New Jersey grapple with the cost of Hurricane Sandy.

Andrew Cuomo, the governor of New York, warned on Thursday that the storm will cost New York $33bn (£21bn).

McDonald’s also saw sales drop last month in China, which has been a growing market for the company. The business plans to have about 2,000 outlets in the world’s fastest-growing major economy by the end of next year. McDonald’s shares fell on the unexpectedly weak figures and were down 0.4pc at $86.60 in early afternoon trading on Wall Street. They have fallen 13pc so far this year.