Falling sales in the US and Europe and charges of $656.9 million to cover the cost of closures, restructuring and job losses have pushed McDonald's to a Q4 loss of $344 million, its first ever.

Only days earlier, McDonald's was let off the legal hook with the dismal of the first 'obesity' suit against it, which could have opened the flood gates to a host of similar suits.

McDonald's was accused of negligence in not making clear the potential health risks of a diet overly reliant on fast food. But the judge ruled that consumers could not blame McDonald's for their excessive consumption of its burgers.

Public opinion has tended to side against the plaintiffs. Ordinary Americans have found it hard to stomach the suggestion that anyone could have missed the avalanche of publicity over the health dangers of fast food. But ironically it is precisely the growing concern over fast food and health that is at least partly behind McDonald's falling sales.

In other areas too, McDonald's fortunes have changed. The company has responded actively to criticism of its environmental record, but still produces over a million tons of packaging annually. Once a flagship for the American dream, the opening of the first McDonald's in Moscow or Beijing could guarantee international publicity. More recently, the anti-capitalist backlash and contentious US foreign policies have made it a target for anti-American sentiment.

Although public opinion favored McDonald's in the obesity case, these are issues that for some consumers have tarnished its all-American image. McDonald's has escaped its recent day in court financially and legally intact. But by keeping fast food in the headlines, the case may very well prompt many previously loyal consumers to examine their own diets and to seek out more healthy alternatives. As the company dips into the red, it's the kind of publicity it can do without.  
 
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