Despite higher earnings per share and revenues during the first quarter of the year, which ended for McDonald’s this March 31st, comparable sales and operating income declined – affected by comparison against strong prior year results that included an additional day in 2012 due to leap year.
For the quarter, Europe’s results were dampened by ongoing economic uncertainty. First quarter comparable sales were down 1.1%, while operating income increased 1% (up 1% in constant currency) – led by performance in the U.K. and Russia, partly offset by Germany. Moving forward, the segment’s business plans emphasize building market share by featuring value across all day parts, offering compelling premium products and expanding the brand’s presence through extended operating hours and new restaurant growth.
Worldwide slowdown
In the U.S., comparable sales decreased 1.2% in the first quarter due in part to the challenging eating-out environment. Operating income declined 3% for the quarter. Despite these results, McDonald’s U.S. outperformed the competition and increased market share. During the quarter, the U.S. fortified its value leadership position with the Dollar Menu, expanded its menu variety with innovative new products and enhanced the customer experience through ongoing restaurant re-imaging. Looking ahead, the U.S. is focused on menu and convenience initiatives to drive sales and restaurant profitability. “McDonald’s remains diligently focused on enhancing our menu, restaurants and the overall customer experience to become more relevant to today’s consumers,” said McDonald’s President and Chief Executive Officer Don Thompson. “While the 
Company’s results for the quarter reflected difficult prior year comparisons and the ongoing impact of global economic headwinds, we continue our efforts to build market share and deliver sustained profitable growth for all stakeholders.” In Asia/Pacific, Middle East and Africa (APMEA), first quarter comparable sales declined 3.3% primarily due to ongoing weakness in Japan and negative results in China. The segment’s quarterly operating income was down 1% (up 2% in constant currencies). McDonald’s APMEA remains focused on driving performance by offering unique value platforms, accelerating growth at breakfast, and broadening accessibility through service and convenience initiatives and new restaurant development. “We have an outstanding brand, an aligned System and an unsurpassed global infrastructure – making us uniquely well-positioned to capitalize on future growth opportunities around the world. We are committed to strengthening our business by building upon the solid foundation that is already in place. As we move forward, top-line comparisons will begin to ease while the challenging global environment and bottom-line pressures are expected to persist. We are confident that we have the right plans in place to differentiate the McDonald’s experience and strengthen our business momentum for the long term,” Thompson concluded.
New packaging design
McDonald’s has begun implementing a new packaging design on all carry-out bags and fountain beverage cups with QR codes. This initiative is the latest step in the company’s ongoing commitment to provide consumers with information to help them make informed choices. The launch began in the U.S. and will continue rolling out worldwide through 2013, with the text being translated into 18 different languages. The new packaging is designed to communicate brand stories in an engaging and modern way. A blend of text, illustrations and a QR code will deliver interesting facts about the brand and make nutrition information easily accessible from mobile devices. “Our new packaging is designed to engage with customers in relevant ways and celebrate our brand,” said Kevin Newell, McDonald’s Chief Brand Officer. “Customers tell us they want to know more about the food they are eating and we want to make that as easy as possible by putting this information right at their fingertips.” In addition to gathering consumer input on these designs, McDonald’s consulted its Global Advisory Council, a group of independent advisors in the areas of nutrition, public health and fitness. These outside experts emphasized the importance of providing access to nutrition information, and support using the new packaging to directly connect customers to information about McDonald’s menu. McDonald’s was one of the first quick-service restaurants to introduce nutrition information on packaging at the 2006 Olympic Winter Games in Torino, Italy. This latest initiative builds on the company’s history of providing nutrition information to customers, also available through in-restaurant menu boards, brochures, tray liners and a variety of digital platforms such as mobile web, apps, kiosks and desktop. McDonald’s has a long record of sustainability leadership action to create positive change. Nearly 80 percent of the company’s consumer packaging in the majority of McDonald’s markets is made from renewable paper or wood-fiber materials.
Ray Kroc Awards for Europe
McDonald’s Europe has also recently announced the 73 restaurant managers who are winners of the first ever Ray Kroc Awards for Europe. Chosen from over 7,300 restaurants the 73 managers represent the top one percent of McDonald’s restaurant managers from across the region. The Ray Kroc Awards were established in the U.S. 14 years ago and launched for the first time in Europe this year. Named after McDonald’s Corporation founder, Ray Kroc, they acknowledge and reward hardworking restaurant managers who deliver superior results in team performance and operational excellence.
“Today is about recognizing the achievements of our restaurant managers and the critical role they play in delivering our outstanding customer experience”, said Doug Goare, President of McDonald’s Europe. “We believe good people practice leads to a better customer experience, and our managers make an enormous contribution to bringing our values to life and ensuring McDonald’s is and continues to be a great place to work.” As one of the largest employers in Europe, McDonald’s is committed to creating employment opportunities for people of all ages and from all backgrounds, as well as boosting employability to help people get the skills and experience they need to progress in their careers. In the past six years, it has created over 75,000 jobs in Europe. The Ray Kroc Awards are just one of the many workplace initiatives McDonald’s has introduced in Europe. McDonald’s has a proven track record of providing opportunities for progression and promoting from within; around 90% of restaurant management began their careers as crew members. Recipients of the Ray Kroc awards are chosen by McDonald’s owner-operators and regional staff, who nominate restaurant managers in recognition of their hard work, dedication, and commitment to McDonald’s and its customers. From there, a selection committee of representatives from McDonald’s Europe operations, training, and human resources teams select the Award winners.