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Sales drop from Big Macs to nuggets

McDonald's Corp. is having trouble stomaching the competition.

The world's biggest hamburger chain said Thursday that a key sales figure fell for the first time in nearly a decade in October, as it faced the double whammy of a challenging economy abroad and intensifying competition at home.

The company, based in Oak Brook, Illinois, says global revenue at restaurants open at least 13 months fell 1.8 per cent for the month. The last time it dropped was in March 2003.

The figure is a key metric because it strips out the impact of newly opened and closed locations. It's a snapshot of money spent on food at both company-owned and franchised restaurants and does not reflect corporate revenue.

McDonald's says the figure fell 2.2 per cent in both the U.S. and Europe in October. In the region encompassing Asia, the Middle East and Africa, it dropped 2.4 per cent. CEO Don Thompson cited the "pervasive challenges of today's global marketplace" for the declines.

In Europe, where McDonald's gets 40 per cent of its business, McDonald's said it would offer new meal combinations at various price ranges amid ongoing economic uncertainty, and continue remodeling restaurants. The company said positive results in the United Kingdom were offset by declines across many other regions.

In Asia, the company said it plans to differentiate itself with menu offerings tailored to local tastes.

After years of outperforming its rivals, McDonald's has been hitting some road bumps recently, with longtime rivals such as Burger King and Wendy's Co. reviving their brands with improved menus and new TV ad campaigns. Taco Bell, owned by Yum Brands Inc., is also enjoying growth with the help of new offerings such as it Doritos Locos Tacos and higher-end Cantina Bell bowls and burritos.

The Canadian Press


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