McDonald’s goes beyond drive-thru as sales skyrocket

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Mcdonalds (NYSE: MCD) credits customers eating more food at higher prices for a third-quarter result that far exceeded analysts’ expectations.

Yet almost as important as menu changes are to the success of the king of fast food, customers aren’t just heading to drive-thru for their meals like they did at the start of the pandemic, but come inside again for a restaurant dining experience.

This could give McDonald’s a competitive advantage as it is better able to meet customers where they want to eat.

An oversized neighborhood

The Golden Arches said third-quarter sales of $ 6.2 billion were up 14% from the same period last year, as it still relied heavily on its “3 D” strategy. “digital, delivery and drive-thru service. The restaurant said its average check increased over the period due to a combination of customers ordering more food per visit and higher menu prices.

He was also helped by the boost given by his entry into the chicken sandwich war. Although very late in the game, McDonald’s seems to have made up for lost time by introducing a special worthy of the name on the menu.

It also appears to be attracting customers to the chain, as same store sales grew 9.6% in the US and 12.7% globally. On a two-year basis, compositions were almost 15% higher in the United States, up 9% in most countries in Europe and almost 5% higher in Japan and Latin America.

Image source: Getty Images.

Open for business

While the 3-D strategy has undoubtedly still played an important role in increasing sales, McDonald’s seems to have been successful in attracting many customers to its restaurants to sit in its dining rooms again.

Mobile device location data from analytics firm Placer.ai revealed that while foot traffic to the hamburger joint varied somewhat during the quarter, it was largely back to parity with 2019.

Where the channel’s visits fell by a third in January compared to the same month in 2019, they were almost stable in July. In August, store visits were slightly ahead at 1.5%, while in September that figure fell 1.2% below the two-year comparison.

Placer.ai VP of Marketing Ethan Chernofsky said: “The ability to maximize and harmonize the experience across channels has been a key asset for McDonald’s thus far and will likely continue to provide an advantage to the future. “

Keep an eye on the costs

McDonald’s best performance contrasts with International restaurant brands‘s Burger King, who cited rising costs and higher labor spending as reasons to miss Wall Street expectations.

McDonald’s faces its own workforce issues as the mob of ‘Fight for $ 15’ union activists staged a day of strike action in May to protest allegations of sexual harassment and low wages, and the labor market. hard work makes it more difficult to find good workers.

Fortunately, the restaurant stock has invested heavily in technology, which has helped it weather the worst of the pandemic and could potentially serve as a way to offset the demands of a volatile labor market.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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