McDonalds unit sales down 6.6% in 1996 at domestic stores, finally admits it's got a problem: (from briefing.com)
>>Just like an alcoholic in denial, it has taken a long time for the world's leading fast-food franchise to admit it had a problem. However, it appears the company has finally come to grips with its situation and can now focus on the steps necessary to facilitate a recovery, rather than continuing the denial and the deception. In the company's annual report, McDonald's finally admitted that 1997 "will be a year of transition" for its U.S. business. In its most intelligent actions in quite some time, the company has indicated it will concentrate on expanding its franchise internationally --where it continues to experience excellent growth-- while doing what it can to endure the margin cutting competitive pricing environment domestically. Noting a 6.6%, or $99,000 per unit, decline in domestic average same-store sales to $1.44 million per unit, the company plans to open fewer units in 1997. The company's plan to open 2,400-2,800 new units worldwide this year will be dominated by a 7-to-3 margin of units opened outside the U.S., an area where the company has relied on for a significant portion of its growth over recent years. McDonald's most aggressive expansion efforts will take place in China, where it plans to triple the number of units over the next three years from the current 117 restaurants. As for its domestic franchise, the company will focus on improving service and accuracy in its drive-thru business, which accounts for 54% of business. Though it didn't taken a rocket scientist to come up with this formula, the plan make far more sense than the company's most recent misguided efforts.>>
Nice to see FM holding up during this correction, proving for the time being that it isn't overvalued.
D. Kuspa |
