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Tuesday, 17 December, 2002, 18:24 GMT
McDonald's heading for the red
McDonald's restaurant
McDonald's is facing stiffer competition
McDonalds has warned that it is on track to post its first ever loss, exacerbating worries that the fast food giant's golden age may be over.

The company said it expected to make a loss of between 5 and 6 cents a share after financial charges in the final three months of the year, and warned that a recent dip in sales had accelerated in December.

"This has been a difficult year and our financial performance has been below expectations," said McDonald's finance chief Matthew Paull.

Last month, McDonald's closed 175 restaurants and laid off 600 corporate staff, citing a year-long downturn in sales and profits amid weak economic growth.

The company's troubles are also thought to reflect market saturation and growing consumer resistance to eating beef following outbreaks of mad cow disease in Europe and Japan.

Empire-building

Intense competition from rivals offering alternative fast food options such as pizzas, sandwiches, and tacos has put the company under further pressure.

Last month's retrenchment exercise, which saw the company pull out of three countries in Latin America and the Middle East altogether, marked an abrupt about-turn for a company that had until then pursued a policy of aggressive expansion.

McDonald's has about 30,000 restaurants worldwide, making its iconic golden arches one of the world's best known brand logos.

In the US, the firm has tried to revive its flagging sales figures by offering steeply discounted menu deals.

But the cheap meals have yet to take effect, with like-for-like sales in US restaurants falling by 1.3% in October and November compared with the same period last year.

See also:

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