McDonald's Profit Drops 30%  

TEMPO.CO, Jakarta – America's fast food giant McDonald's (MCD) suffered a 30-percent year-on-year profit decline in the third quarter of this year from US$1.52 billion to US$1.07 billion; the result of a meat scandal in China and intense competition in the United States.

In America, the company has been trying to maintain its customers amid tight competition and a shift in people's eating habits towards healthier food.

In China, McDonald's business took a hit after a local plant that supplies processed food to restaurant chains was reported to have expired and low-grade meat products. The plant had ceased operations since, leaving McDonald's restaurants unable to sell burgers, chicken nuggets and other menus.

"McDonald's performance in the third quarter of this year showed a significant decrease compared to last year," CEO Don Thompson said as quoted from a release yesterday. "By all measures, our performance fell short of our expectations."

Meanwhile, Chief Operating Officer Tim Fenton admitted in January that the company suffers from an "overcomplicated" menu that "didn’t give restaurants an opportunity to breathe."

The company tried to offset declining sales by raising prices slowly, but it drove customers further away. After raising its prices by three percent in June compared to the previous year, McDonald's cheapest menu are becoming expensive.

REUTERS | BUSINESS INSIDER