McDonald’s ‘low-price focus’ boosts quarterly sales

McDonald’s Corporation reported a higher-than-expected quarterly profit as its ‘low-price focus’ helped drive strong sales in Europe and the United States. Shares of the company rose more than 3 per cent after June sales at restaurants open at least 13 months were stronger than analysts expected in each of the world’s biggest hamburger chain’s operating units. During the month, closely watched same-restaurant sales were up 6.9 per cent in the United States, 9.1 per cent in Europe and 4.8 per cent in McDonald’s Asia/Pacific, Middle East (ME) and Africa unit. “As we begin the third quarter, our momentum continues with July global comparable sales expected to be between 4 and 5 per cent,” McDonald’s Chief Executive Officer Jim Skinner said in a statement. Analysts were expecting June same-restaurant sales to rise 2 per cent in the United States, 3 per cent in Europe and 2 per cent in the Asia/Pacific, Middle East and Africa unit. Europe is McDonald’s largest market for sales, contributing about 40 per cent of revenue, and the US is a close second. “It’s the consistency of the everyday value message that has helped them a lot,” said Lazard Capital Markets analyst Matthew DiFrisco, who added that McDonald’s is good at adjusting its marketing to keep customers coming in. The company has been taking market share from its fast-food peers for many months. It has benefited from adding value-priced Dollar Menu items as well as high-margin beverages like coffee to broaden its appeal beyond the young males that account for the biggest share of sales at most other fast-food chains. It is also renovating restaurants in Europe in the United States, which has boosted business. From / Gulf Today