McDonald's shifts focus to energize store sales

McDonald's Corp., the world's largest restaurant company, will focus on boosting sales at existing stores rather than opening new outlets to increase profit.

A gain of 1 percent in sales at locations open more than a year would raise McDonald's pretax income by $115 million with "minimal" capital investment, Chief Financial Officer Pete Bensen said Wednesday at a Cowen & Co. conference in New York. Comparable-store sales consist of revenue at stores open at least 13 months.

"Our primary focus is on driving comparable sales," Bensen said.

The strategy, responsible for 55 consecutive months of higher global sales through November, might have generated slower U.S. gains in December. A franchisee survey last week showed comparable-store sales may have increased by 1.8 percent, the weakest growth since McDonald's sales rebounded in 2003.

McDonald's fell $1.35, or 2.5 percent, to $52.41 in New York Stock Exchange composite trading, the lowest in four months. The stock has dropped 11 percent this year after advancing for five consecutive years.

A consultant, Richard Adams, who conducted the survey, said last week competition from Burger King Holdings Inc. and Wendy's International Inc. hurt sales of McDonald's double cheeseburgers, a popular item on its dollar menu.

McDonald's plans $2 billion in capital spending this year to renovate 1,500 restaurants and open 1,000 new outlets, Bensen said. Openings will fall within the company's target of 1 percent to 2 percent growth after deducting units to be closed.