McDonald's has predicted a rough year for U.S. branches as the company recently warned other local stores of added costs and potentially lower revenue this year due to strong performances recorded by overseas stores in the past year.
Still considered as the world's largest fast-food chain, McDonald's branches in other countries better than U.S. stores as accounted for in the company's fourth quarter 2018 results.
According to Reuters, Bernstein analyst Sara Senatore said, "The persistent strength of non-US markets is especially impressive in light of slowing growth in China and economic softness in Europe, particularly in the UK where McDonald's business appears nearly unstoppable."
Global operations proved to be stronger than U.S. outlets as it was revealed that overseas stores had a sales growth rate of 4.4 percent. Financial forecasters previously predicted a growth rate of 3.9 percent. With global outlets exceeding expectations, it was predicted that U.S. branches may see added costs this year.
McDonald's CEO Stephen Easterbrook acknowledged that there will be "significant challenges" for U.S. outlets in 2019. One of these is the remodeling plans laid out for a number of American stores. These plans are expected to increase expenses within American branches as the chain's home country struggles to overtake growth overseas.
To help improve customer traffic, McDonald's stores in the United States will be remodeled to pave the way for digital ordering booths that seek to provide an easier ordering for customers. Furthermore, a new mobile ordering service will also be introduced to American consumers.
Mobile ordering has already worked well for McDonald's outlets abroad. A lot of customers have stressed the ease they experienced after the service was implemented.
Aside from new services and ordering platforms, McDonald's has started revamping its food processing systems in U.S. outlets. Artificial preservatives have been yanked from classic burgers. Processors now use fresh beef to improve customer experience.
Meanwhile, McDonald's recently lost a trademark battle in Europe. According to Forbes, the European Union Intellectual Property Office ruled in favor of Supermac's. While the American chain can still appeal against the decision, there is a long road ahead before it can overthrow the alleged "trademark bullying" the food chain was accused of.
Two years ago, Supermac's, an Irish restaurant chain, appealed before the EU Intellectual Property Office, alleging that McDonald's was violating the trademark law under the European Union. The ruling is just one of the previous trademark battles that the Illinois-based food chain underwent over the past 69 years since it was founded in 1955.
