McDonald's dollar menu keeps gaining fans in the recession, but the world's largest burger chain said Friday that sales slipped for the first time in at least 25 years.
Though the fast-food giant said revenues jumped 7% to nearly $6 billion in the final three months of 2009, it suffered a 3% decline for the full year to $22.7 billion. That was its first annual setback since at least 1984, according to its company filings.
Falling commodity costs and currency fluctuations helped boost the company's fourth-quarter profits 23% to $1.2 billion from the same period in 2008. For the full year, McDonald's profits climbed 6% to $4.6 billion.
Sales growth at its restaurants that have been open at least a year - considered a key measure of a retailer's strength - slowed in the fourth quarter as penny-pinching diners tried to cut back still further.
Analysts said McDonald's fortunes won't dramatically increase until the economy improves, especially the U.S. unemployment rate.
Still, McDonald's did markedly better than nearly all its fast-food competitors, which have been slashing prices at the expense of profits to get customers in the door.
McDonald's said sales in the U.S. are benefiting from the national debuts of the breakfast Dollar Menu and the Mac Snack Wrap - a new spin on its popular Big Mac hamburger that sells for around $1.50 - as well as existing McCafe coffee drinks and the premium-priced Angus Burger.
"In this challenging economic environment, we feel very good about our trends," CEO Jim Skinner told investors and analysts during a conference call.
Yet the competition remains fierce. While McDonald's added breakfast items to its Dollar Menu and promoted its low-priced menu items, rival Burger King introduced a $1 double cheeseburger in the U.S. during the fourth quarter.