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McDonald's U.S. Same-Store Sales Down in January

LOS ANGELES -- Despite a sluggish performance in the United States, McDonald's Corp. beat expectations with a 2.6-percent increase in January sales at established restaurants, according to a report by Reuters.

The chain's overseas results overshadowed its domestic performance. Sales at restaurants open at least 13 months fell 0.7 percent in the U.S., while those in Europe and the Asia/Pacific, Middle East and Africa (APMEA) region both rose 4.3 percent.

Jefferies & Co analyst Jeff Farmer said McDonald's Europe and APMEA sales are getting a lift from refurbished stores, extended hours and expanded menus -- factors that boosted its U.S. business two years ago. But back at home, it is a different story.

"There is a near full-scale market share battle being waged in the U.S. with discounting and value offers intensifying on a daily basis," Farmer said in a client note.

Still, McDonald's noted its U.S. results outperformed those of its fast-food rivals.

In January, McDonald's U.S. sales benefited from the national debuts of the breakfast Dollar Menu and the Mac Snack Wrap -- a new spin on its popular Big Mac hamburger that sells for around $1.50 -- as well as McCafe coffee drinks and the premium-priced Angus Burger, Reuters reported. The Oak Brook, Ill.-based company reported a 0.1 percent rise in U.S. same-store sales for the recent fourth quarter -- better than the results from rival Burger King, which earlier this month said same-store sales for the United States and Canada fell 3.3 percent during its quarter ended Dec. 31.

For the early part of the U.S. recession, McDonald's and other fast-food chains benefited when the downturn sent customers to lower-priced fare. However, the so-called trade-down effect is no longer strong enough to offset weaker spending by young men and minority groups, who account for a large number of fast-food customers and have unemployment rates much higher than the overall U.S. jobless rate of 9.7 percent, the report stated.

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