Fourth quarter of 2024 McDonald's saw a sharp loss in sales in America the biggest drop in almost five years. Compared to analysts projections and the company's performance in prior quarters comparable sales in the United States dropped 1.4%. This is the most significant since the COVID-19 pandemic affected restaurant operations due to a number of circumstances such as a Quarter Pounder burger-related E. coli epidemic and consumers growing frugal purchasing patterns. McDonald's had to temporarily halt the sale of Quarter Pounders in about 20% of its American stores due to an E. Coli outbreak that started in late October. This had a significant negative impact on consumer traffic and revenue, especially in the impacted areas.
McDonald's global same-store sales managed a tiny increase of 0.4% surpassing estimates of a loss despite the difficulties in the US market. Strong demand in global markets, especially in the Middle East, China and Japan was main driver of this expansion. However, the company's dependence on value promotions and discounts to draw in frugal clients has sparked worries about possible margin compression. More than a third of McDonald's revenues now come from discounts and although these promotions have increased traffic researchers warn that they could not be long-term viable. McDonald's plans to address these challenges by enhancing digital engagement and food safety procedures bringing back popular menu items like snack wraps and launching new products like chicken strips.
With an emphasis on food innovation market development and digital activities McDonald's hopes to increase customer visits and profitability in 2025 by utilizing its Accelerating the Arches strategy. By 2025 the company intends to open 2200 more restaurants, including major growth in China and other foreign countries. Despite management's cautious optimism over a recovery in US sales, some analysts have voiced concerns about the recovery's pace, pointing to issues with inflation in consumer spending and inconsistent outcomes in other important markets. Given expected pressure from greater discounting and inflationary pressures McDonald is also aiming for an operating margin in mid to high 40 percent range for 2025 which is marginally lower than 45.2 percent attained in 2024. Future performance in the cutthroat fast-food industry will be greatly influenced by the company's capacity to overcome these obstacles and carry out its strategic plans.
McDonald's global same-store sales managed a tiny increase of 0.4% surpassing estimates of a loss despite the difficulties in the US market. Strong demand in global markets, especially in the Middle East, China and Japan was main driver of this expansion. However, the company's dependence on value promotions and discounts to draw in frugal clients has sparked worries about possible margin compression. More than a third of McDonald's revenues now come from discounts and although these promotions have increased traffic researchers warn that they could not be long-term viable. McDonald's plans to address these challenges by enhancing digital engagement and food safety procedures bringing back popular menu items like snack wraps and launching new products like chicken strips.
With an emphasis on food innovation market development and digital activities McDonald's hopes to increase customer visits and profitability in 2025 by utilizing its Accelerating the Arches strategy. By 2025 the company intends to open 2200 more restaurants, including major growth in China and other foreign countries. Despite management's cautious optimism over a recovery in US sales, some analysts have voiced concerns about the recovery's pace, pointing to issues with inflation in consumer spending and inconsistent outcomes in other important markets. Given expected pressure from greater discounting and inflationary pressures McDonald is also aiming for an operating margin in mid to high 40 percent range for 2025 which is marginally lower than 45.2 percent attained in 2024. Future performance in the cutthroat fast-food industry will be greatly influenced by the company's capacity to overcome these obstacles and carry out its strategic plans.
