McDonald's lures customers back after two-year decline

McDonald's, the fast food chain, yesterday appeared to have found the recipe for winning back customers when it reported a turnaround in sales after two years of decline.

The company, fighting intense competition and heightened consumer concerns over fatty foods, reported a 4.9% increase in sales during the second quarter at restaurants in the US that have been open for more than a year. The increase, in McDonald's most important market, was the best performance by the chain in five years.

McDonald's has revamped its menu in the US, is investing heavily to improve the look of its older restaurants and has put the brakes on expansion. New items including salads have been introduced while fruit and vegetables have been added to children's Happy Meals.

Despite the improvement in sales in the US, the company reported a 5% fall in second quarter profits to $470.9m, dragged lower by weak performance in Britain, Germany and Japan and an earlier announced restructuring charge. Operating profits in Europe were 7% lower.