Golden Arches start to dim as McDonalds shuts US stores

Posted on 2 Jul 2015 by Aiden Burgess

McDonalds is set to downsize the number of its US stores for the first time in four decades.

The restaurant chain plans to close 700 of its under-performing worldwide stores including closing more of its US stores than it plans to open this year – for the first time since the early 1970s.

The downsizing comes in response to a 2.3% decrease in the company’s global comparable sales and a 2.6% decrease in US sales during the first quarter of 2015.

Its US operating income for the quarter also declined 11%, which McDonalds said “reflected weak sales results and the impact of restructuring and restaurant closing changes.”

McDonald’s spokeswoman Becca Hary declined to give a figure of the number of restaurants set to close in the US, but said the reduction would be ‘minimal compared with its total 14,300 locations in the US.

McDonalds has not reported an annual reduction in US locations since 1970, according to archived filings with the Securities and Exchange Commission.

McDonald’s Global Communications representative Heidi Barker Sa Shekhem stated: “As our senior leadership team stated on the third quarter earnings call, McDonald’s is moving with a sense of urgency to improve our financial performance by taking actions based on the long term.

“This includes a diligent review of our Corporate Home Office and McDonald’s USA’s structures and resources in order to redirect nearly one hundred million dollars in savings toward business priorities, such as digital and new restaurant platforms, that will support our key growth drivers.”

McDonalds currently serves 69 million people each day in its 36,000 restaurants across the world.

McDonalds’ representatives say that the company sells a daily average of 75 hamburgers a second, which equates to 225 million hamburgers sold worldwide each year.

In addition to its hamburger sales, McDonalds sells about 9 million pounds of French fries across the globe daily, and is the dominant buyer of potatos in the US, purchasing 3.4bn lbs (1.54bn kgs) each year.

McDonald’s CEO Steve Easterbrook revealed in April that as part of their major restructuring plan, 350 restaurants in the US, Japan and China will close in addition to the 350 outlets already closed this year.