McDonald’s (MCD) reported total sales growth and same store comparable sales today which were McHuge. Here is how it breaks down:
Global MCD: Comp sales +8.0%; Systemwide sales in constant currency +9.5%
US: Comp sales +6.7%; Systemwide sales +7.6%
Europe: Comp sales +7.6%; Systemwide sales in constant currency +9.5%
Asia/Pac/MidEast: Comp sales +7.2%; Systemwide sales in constant currency +10.0%
There is no denying the fact that MCD is able to capitalize on: more traffic flow in the US as consumers trade down (in economics we call this the “Substitution Effect”); expanded hours around the globe; capturing share of the quick service coffee business as the McCafe concept continues to expand; and, growth in China / Russia.
The real question for MCD right now is how they will make adjustments to the dollar value menu. Due to the rise in beef prices these menu items have become less profitable and possibly loss leaders. There is no doubt in my mind that MCD will carefully design an alternative marketing and product strategy.
Finally, MCD has built four restaurants on the Beijing Olympic site: one in the Olympic Village to serve athletes, one at the main press center to serve the huge media population and two for the spectators in the main activity area, the Olympic Green. This will not only help August sales but will also help to bolster post Olympic sales once the athletes return home.
At the time of this Blog entry Scott Rothbort, his family and or clients of LakeView Asset Management, LLC were long shares of MCD --- although positions can change at any time.
Posted By Scott Rothbort at August 8, 2008