US hunger for McDonald's slowing

McDonald's low-cost meals are not tempting cash-strapped US consumers

Weak US demand for McDonald's has taken some of the shine off the company's quarterly figures, which beat Wall Street forecasts.

For its January to March period, McDonald's said net income grew to $946.1m, up from $762.4m a year earlier, lifted by overseas growth.

European sales in outlets open at least a year rose 11% - a record, while US sales rose 2.9%.

US sales fell in March for the first time in five years.

The fast-food chain forecast an improvement in its US business in April, and is forecasting same-store sales will rise by 2% to 2.5%.

But the sluggish figures show that even McDonald's, with its focus on budget meals, is suffering as the US economy is battered by a weak housing market, shrinking employment and tighter lending conditions.

The picture looks brighter outside the US, with growth in Europe driven by the French, UK and German markets.

McDonalds is in the middle of rolling out new-look restaurants around the world, with almost half of the UK's 335 busiest branches refitted in the past 18 months.

These feature comfortable chairs and offer customers free wireless internet access - a move that mimics coffee chains like Starbucks.

Shares in McDonalds were down 1.4% at $57.85 in afternoon trade in New York.