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Mon 8th Dec 2014 - Update: McDonald's sales dip, White Brasserie, JDW
McDonald’s sales drop in all three major regions: McDonald’s has announced that global like-for-like sales decreased by a much higher than expected 2.2% in November with comparable sales down by 4.6% in the US, 2% in Europe and 4% elsewhere in the world. Analysts have predicted that 2014 will be the first year of negative global like-for-like sales since 2002. “Today’s consumers increasingly demand more choice, convenience and value in their dining-out experience,” said McDonald’s president and chief executive Don Thompson. “We are working to bring the McDonald’s ‘Experience of the Future’ to life for our customers to better deliver against these evolving expectations. Each of our geographic segments is focused on regaining business momentum by prioritising initiatives to improve comparable sales performance in the near-term, while developing innovations to deliver sustained profitable growth through McDonald’s Experience of the Future.” The company added: “ The US comparable sales decrease of 4.6% occurred amid strong competitive activity. To restore momentum, McDonald’s US is diligently working to enhance its marketing, simplify the menu, and implement a more locally-driven organisational structure to increase relevance with consumers. Europe’s comparable sales decreased 2.0% in November as positive performance in the UK was more than offset by very weak results in Russia and negative results in France and Germany. While the operating environment remains challenging across most of the segment, McDonald’s Europe remains focused on providing customers with locally relevant value and premium menu options, including differentiated beverage and breakfast offerings. In November, APMEA’s comparable sales decreased 4%, reflecting the ongoing impact of the supplier issue on performance in Japan and China, partly offset by positive performance in Australia. Brand recovery campaigns continue in the markets affected by the supplier issue. To drive customer traffic and improve performance, markets across APMEA are leveraging compelling menu options, value platforms and the segment’s enhanced convenience initiatives.” McDonald’s shares fell 3% premarket on Monday after the company also warned that weakening sales would “significantly pressure” margins in the quarter. Analysts on average had estimated a decline of 1.7% rather than 2.2%, according to Consensus Metrix. The company said the supplier scandal in China would reduce its profit for the quarter ending 31 December by 7-10¢ per share. McDonald’s US like-for-like sales have not increased since October 2013. McDonald’s shares have fallen 5.5% in the past six months.

White Brasserie Company to open fifth pub next Monday: White Brasserie Company, the pub offshoot of Brasserie Blanc operator Brasserie Bar Co, will open its fifth pub next Monday (15 December) as part of plans to open 20 White Brasserie Company pubs in three years. The new site is the Sun Inn in Chobham, an Enterprise Inns site, which becomes the company’s third venue with the tenanted pub company. The large, open bar area to the front of the pub seats 50, whilst a newly built extension to the rear houses the 96-cover brasserie, with a design that draws on the simple detailing of stable buildings found in the local area. The brasserie and bar overlook a front garden with 34 covers, whilst a walled courtyard garden seats an additional 44. The company has found that its first two pub openings, The King’s Head in Teddington, Middlesex and The Queen’s Head in Weybridge, Surrey, have grown like-for-like sales for four consecutive years. Its third pub opening was The Hare in Harrow Weald, Middlesex and a fourth pub, The British Queen in Orpington, Kent, a Spirit leased pub, opened in September after a £1m co-investment. Chief executive Mark Derry said in September: “We think premium pubs are a big opportunity right now. Competition is much more fierce in the restaurant sector. It’s very hard for a competitor to take away your business when you have established a premium pub. We are serving restaurant quality food in pubs, the same 100% fresh food as we serve in Brasserie Blanc. There are not many people doing it. Our pubs start with lower trading than the brasseries – but our two prototype pubs have seen four years of like-for-like sales growth and keep on growing. We think we will get better returns from pubs over the length of a lease. We are serving the same food at the same price point – and we haven’t had a single written complaint from a customer in two years.” Derry reported a lot of time has been spent forging a new kind of lease at The Sun Inn that has a turnover-related top-up element that allows Enterprise to benefit from food sales.

Wetherspoon to open second Republic of Ireland site next week: Pub operator JD Wetherspoon is to open its new pub in Dun Laoghaire next Tuesday (16 December) with the creation of 60 new jobs. The company has spent €2.8 million developing the outlet, its second in the Republic of Ireland, on the site of an existing bar, in The Pavilion Centre, Marine Road. The Wetherspoon pub, which will retain the original name The Forty Foot, will be managed by Dublin-born Will Malone. The Forty Foot is part of the Pavilion Theatre complex overlooking Dun Laoghaire harbour. Less than a mile further along the rock-strewn coast is Sandycove and the famous ‘Forty Foot’. The new-look pub, which is on two floors, will feature one bar on each. There is a pavement cafe-style terrace and a second floor balcony and terrace, overlooking the bay.

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