Fish McBites a flop, hurt McDonald's sales
Big Macs and Chicken McNuggets have worked for McDonald's over the years, but its new Fish McBites l…Big Macs and Chicken McNuggets have worked for McDonald's over the years, but its new Fish McBites look to be a non-starter. They sure didnt hook American fast-food fans in February.
The world's biggest hamburger chain said March 8 that a key sales figure was down 3.3% in the US for the month. Even excluding the Leap Year day last year, the company said the figure was flat.
McDonald's had had high hopes for Fish McBites nuggets, which were were its first new Happy Meal entree in a decade, and launched in three sizes. But the Oak Brook, Illinois-based chain is facing a rapidly shifting industry, with chains such as Chipotle and Panera reshaping customers' expectations about fast food. An increase in payroll taxes that took effect in January isn't helping.
Long-time competitors such as Burger King, Taco Bell and Wendy's are also revamping their menus and stepping up advertising. Making matters worse, McDonald's CEO Don Thompson, who took the helm this summer, has said that he expects overall growth in the industry will continue to be flat to down for some time.
In response, McDonald's is playing up its Dollar Menu to attract budget-conscious diners, a strategy that could hurt profit margins. The chain is also increasing its limited-time offers as a way to keep its menu fresh.
Results in other parts of the world were mixed. Globally, McDonald's said sales at established restaurants fell 1.5% for the month. When excluding the impact of Leap Year 2012, the company said sales rose 1.7%. In Europe, McDonald's sales were down 0.5% or up 2.7% when factoring out Leap Day from a year ago. The company has been focusing on expanding its breakfast menu and restaurant hours throughout the region, which represents its biggest market by sales.
In the region including Asia Pacific, the Middle East and Africa, sales figure were down 1.6%, or up 1.5% taking account of the calendar shift. Although sales in China and Australia were positive, McDonald's continued to struggle in Japan, where sales sank 12% at restaurants open at least 13 months. That was following a 17% drop in January.
