BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: Business
Front Page 
World 
UK 
UK Politics 
Business 
Market Data 
Economy 
Companies 
E-Commerce 
Your Money 
Business Basics 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 

Tuesday, 24 July, 2001, 15:37 GMT 16:37 UK
McDonald's hit by mad-cow fears
A McDonald's restaurant in the UK
McDonald's may close 250 underperforming restaurants
Fears over mad-cow disease, coupled with the strong dollar, have battered profits at fast-food chain McDonald's.

The US giant announced that second-quarter profits fell to $441m (311m), from $526m in the same quarter of last year.

During the first half of this year, McDonald's opened only 543 new restaurants worldwide, compared with 1,193 in the first half of 2000.

A McDonald's meal
European consumers are still worried about beef
"This has been a tough six months," said Jack Greenberg, McDonald's chairman and chief executive.

Although the firm welcomed a 3% increase in sales in Europe, a market where it has at times faced consumer opposition, "there are still consumer concerns about the safety of the European beef supply," Mr Greenberg said.

The firm also said results were hit by the weakness of certain key currencies against the dollar, in particular the pound, the euro, the yen and the Australian dollar.

Closures

Mr Greenberg said McDonald's has put 250 of its restaurants - mainly located in emerging markets - under review for possible closure, as part of a group-wide cost-cutting programme.

McDonald's has carried out periodic reviews of its restaurants before, but this is the first such programme across emerging markets.

Company-wide sales did increase slightly in the second quarter, to $10.239bn from $10.238bn a year earlier.

But the firm's operating profit margin fell to 15.2% in the first half of 2001, from 17% a year before.

McDonald's said it expected "significantly stronger" results in the second half of this year, making it likely that full-year profits could still match last year's.

The company's shares bounced up by almost 3% on Tuesday, as the results were no worse than analysts had expected.

Search BBC News Online

Advanced search options
Launch console
BBC RADIO NEWS
BBC ONE TV NEWS
WORLD NEWS SUMMARY
PROGRAMMES GUIDE
See also:

16 Jul 01 | Business
Japanese ambitions for McDonald's
04 May 01 | South Asia
No beef in McDonald's fries
07 Nov 00 | Business
The limits of globalisation
08 Sep 00 | Asia-Pacific
McDonalds cuts ties with Chinese factory
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories