McDonald's suffers from drop in customers

McDonald's has tried to overhaul an image mired by a chicken nugget scandal in China; objects, ranging from a human tooth to pieces of vinyl, found in its food in Japan; and protests over wages in the US. But customers are not biting

The world's biggest fast-food chain said global sales dropped in the three months up to the end of March, reflecting "negative guest traffic".

Revenue fell 11 per cent to $5.95bn compared with the same quarter last year, while net income plunged a third to $812m, or 84 cents per share. Earnings, excluding some items, were $1.01 per share, missing analyst forecasts of $1.06 per share. The strong dollar compounded McDonald's performance, pulling earnings per share down $0.09, the company said.

It was the fourth consecutive quarter of sales and profit declines for McDonald's, whose cheap burgers and fries have lost lustre among consumers, particularly millennials, seeking healthier alternatives.

Steve Easterbrook, McDonald's new chief executive, said the company will unveil a turnround plan on May 4 as it tries to be "more responsive to today's customer".

Mr Easterbrook, who took the helm on March 1, has announced moves to revive McDonald's brand - including curbing the use of antibiotics in its chickens, revamping the menu, and a marketing campaign to pay for food with "lovin". He also announced plans to raise wages for workers in McDonald's-owned restaurants.

But his efforts have done little so far to turn round revenues in the chain's core US market, where like-for-like sales fell 2.6 per cent in the first quarter, compared with the same quarter last year. McDonald's has suffered six like-for-like US sales quarterly declines in a row.

Like-for-like sales in Europe slipped 0.6 per cent but tumbled 8.3 per cent in Asia.

The weak start to the year follows an ugly 2014, when the company recorded its first annual same-store sales decline in a dozen years amid stiff competition in the US from Chipotle and Shake Shack, and declining customer traffic in China and Japan, where meat safety concerns damaged its reputation.

McDonald's said last week it will shut down 131 underperforming stores in Japan, its second biggest market, and warned that it expected global like-for-like sales in April to be negative.

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