The burger-and-fries group has said it will not be able to meet analysts' expectations for the quarter because of poor sales in the UK and Europe.

The news sent shares down almost 13% to a seven-year low.

The group was not alone in disappointing US investors, as leading retailer Kroger and healthcare wholesaler R&K Healthcare Resources also knocked confidence with poor figures.

Europe shuns burgers

McDonald's suffered poor sales particularly in the UK and Germany, which surprised analysts who had been expecting a rebound from last year's mad-cow scare.

Growth expectations for this company have been unrealistic for several years

The fast-food group said it would now cut new openings in the short-term to help pay for the refurbishment of some of its restaurants.

"Our experience and our research shows that many consumers would visit a revitalized McDonald's more often," said Mike Roberts, president of the company's US operations.

It is also planning to spend an extra $20m on its marketing, after suggesting it had misjudged its latest marketing campaign in Europe.

Analysts said the news signalled a more realistic approach to growth from McDonald's.

"Growth expectations for this company have been unrealistic for several years, and management is gradually and reluctantly resetting expectations for investors," said analyst Allan Hickok at Bancorp Piper Jaffray.

Weak US counterparts

Some of McDonald's peers on Wall Street also knocked the market.

Retail giant Kroger reported lower than expected figures for the last three months, knocking 12.5% off its own shares and sending fellow retailer Wal-Mart down 49 cents to $54.26.

The drug wholesaler D&K Healthcare Resources also heightened nervousness when it cut its quarter earnings and withdrew its full year forecasts.

The news wiped 60% off its share price or $14.39 to close down at $9.51.