Oct. 21 - McDonald's attempts to make its menu healthier hasn't delivered healthier results as it blames the economy for its flat sales. Fred Katayama reports.
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McDonald's drive to create healthier offerings hasn't been producing healthier results. Its global sales at stores open at least a year rose less than one percent in the last quarter despite the menu changes, and last month, those sales fell a fraction.
Profit at the world's largest restaurant chain rose 4 percent, but McDonald's didn't sound very optimistic about its outlook. It sees comparable store sales continuing to be flat this month and profit margins to fall in the fourth quarter.
CEO Don Thompson said, "While we are focused on our near-term performance, the current environment continues to pressure results."
But it may be more than just the slow economy. Its introduction of healthier menu items doesn't seem to be pulling in more consumers. Just last month, it announced it would offer customers a choice of veggies or fruits in place of fries for its value meals. It had earlier added oatmeal and chicken wraps. But it has also had to discontinue its fruit and walnut salads.
At the same time, its rivals like Wendy's have been winning over customers with far less healthier new products such as Wendy's 680 calorie Pretzel Bacon Cheeseburger.
McDonald's said it's hiking its dividend 5 percent. But that didn't attract investors. McDonald's shares slumped at the market open. Its stock has been flat this year, while Wendy's has nearly doubled.