Not a happy bite for McDonald’s in Asia

McDonald’s sales in Asia have been affected due to a food scandal which has increased company’s headaches in markets around the world.

The scandal, which broke in July, found that the Shanghai supplier was selling tainted meat, including some food that had fallen on the floor.

The bad news for the company comes at a time when the key markets of China and Japan were clearly spooked by a food scare at an American-owned McDonald’s supplier.

The scare sparked a nearly 10% drop in third-quarter sales at McDonald’s Asia-Pacific, Middle East and Africa division (APMEA). Subsequently, profits in that region dropped by 55%.

McDonald’s wasn’t faring well in Asia, but the company stumbled in all of its markets during the third quarter.

In the U.S., McDonald’s largest market, sales shrank by over 3% during the third quarter due to slower guest traffic amid sustained competitive activity.

Europe was no better. Strength in the U.K. was overshadowed by Germany’s anemic economy and tensions in Russia, where roughly half of its 446 locations are under investigation and nine restaurants have been shut down.

McDonald’s continues to face increased competition from the likes of Chick-fil-A, a privately held restaurant chain.
Chick-fil-A could become the fourth largest in the U.S. by the end of the decade, say trade analysts. .

Overall, McDonald’s profits shrank by 30% to $1.09 a share during the third quarter, widely missing targets from analysts.

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