McDonald’s Sales Not as Great

Even though McDonald’s Corporation (NYSE:MCD) sales were higher in the 4th quarter of 2010 than they were a year ago at the same time, the company still managed to report a lower than expected figure. Sales were lower in both Europe and the United States, however, they were above average in the fast growing Asian market. McDonald’s claims that the lower sales are a result of the resent bad weather. Due to the weather, fewer people have been able to leave their house and make it to any restaurant, and as a result, sales dropped by several percentages. The largest burger chain has experienced several problems throughout the year and they have had to start working on changes. Every business has suffered over the last few months, due to the bad weather and they are all expected to make the same kind of financial reporting. The company confirmed that in order to gain back the lost revenue, they will have to raise the price of their products and services. This expected cost increase could have a negative impact on the company if the planning is not done correctly. Analysts are concerned about McDonald’s raising costs at this time of the year. A higher cost could take many of their customers away, who are looking for a cheaper deal at fast food chains. Due to their recent forth quarter report, their shares have dropped, but it is expected to increase again within the next day or so.

The company has received several negative feedbacks lately and they have even been under pressure from the US government to make certain changes to their menu. Several states have passed laws that require fast food chains to post calorie information on their menu. McDonald’s along with other fast food chains have had to update their menu accordingly, and as a result they have lost several customers. The general public is looking for ways to eat healthy and they are aware of the health factors involved with fast food restaurants. Recent studies have also shown a decrease in the company’s popularity and they are no longer the most favored fast food chain. Due to the problems they have been experiencing, it would be difficult for the company to take drastic measures when it comes to the cost of their food. A slight increase in price at a fast food chain is very noticeable and as a result customers are known to take their business elsewhere.