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4 Trends That Have McDonald’s Sales Shrinking

Changes in eating out habits means trouble for the fast-food company


McDonald's NYSE:MCDBusinessweek list the four main reasons McDonald’s (MCD) is looking at a rough second half of the year.

  1. McDonald’s sales are shrinking due to competition from other fast-food joints. Despite the decrease in sales McDonald’s claims that its market shares are increasing.
  2. Higher labor and commodity costs shrink margins. The American strategy of cheap and affordable food is hurting the company, 14% of McDonald’s sales come from the Dollar Menu.
  3. Customers are moving toward fast-casual restaurants over fast-food restaurants. Restaurants such as Chipotle Mexican Grill (CMG) and Panera Bread (PNRA) are drawing in potential customers.
  4. Europe makes up a third of McDonald’s sales, but the country is distancing itself from burgers. McDonald’s sales in Europe were down 0.1% from last year.

Head over here to see the list in full detail.

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