McDonald’s Replaces U.S. Division President

Stratton is described by McDonald’s as “having roots in restaurant operations,” and that likely means that the company is going to address the slackness it has seen in same-store sales. In its report on October same-store sales, the company said that U.S. sales were down 2.2% compared with October 2011 sales. For the company’s third quarter, same-store sales were up just 1.2%, the smallest increase in McDonald’s three regions.

McDonald’s has been focused on its value meals in the United States, where it claims to lead the market. The problem is that food costs will be rising and, if prices stay low, McDonald’s will not be looking at profit growth. Stratton’s appointment, given his operational background, likely means that the company will seek ways to reduce costs. And that probably means reduced staffing.

Shares are down slightly more than 0.1% in premarket trading this morning, at $84.50 in a 52-week range of $84.05 to $102.22. A new annual low is not out of the question today.

Paul Ausick