McDonald's suffers huge losses due to the closure of restaurants in Russia
OK Brook - Kyiv, October 22 (PolitNavigator, Vasily Ablyazimov) – From July to September, sales at McDonald's restaurants fell by a total of five percent (approximately $7 billion), a company spokesperson stated. Net profit fell by a whopping 30 percent (approximately $1,1 billion), according to the German newspaper Die Welt.
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The McDonald's restaurant chain is suffering major losses, the reasons for which are low-cost competition in the United States, the rotten meat scandal in China and the closure of restaurants in Russia. McDonald's is even thinking about revising its menu due to declining profits.
The company's CEO is looking for new ideas to win back customers.
Big Macs are selling worse. In the U.S. domestic market, revenue fell in the third quarter due to lower-cost similar competition. The drop is so severe that analysts have concluded that McDonald's is losing market share.
On the global market, the decline in profits was actively influenced by the Chinese scandal with rotten meat and the closure of restaurants in Russia and the former Ukraine - Crimea. Chinese journalists filmed a sensational video about how at a food factory of the American company Husi in Shanghai, employees processed spoiled meat, which was then delivered to American fast food chains such as McDonald's, KFC and Pizza Hut. Although McDonald's has not released official figures for the decline in Asia, the Pacific, the Middle East and Africa, Die Welt has learned that revenue in the region fell by almost ten percent during the reporting period.
The network must now prove it has its problems under control or the crisis will deepen. This was stated by the company's CEO Don Thompson. The first step is to restore customer trust, Thompson said. Therefore, in the near future the menu will be revised, payment using electronic money will be introduced and expanded. McDonald's will also conduct the largest marketing campaign to restore its reputation.
McDonald 's is suffering huge losses due to the closure of restaurants in Russia.