McDonald's Reports November Sales Up 4.5%

Multipronged Strategy Pays Off Amid General Economic Gloom

By Published on .

CHICAGO (AdAge.com) -- It's not all bad news out there, particularly if you're selling something for a buck. During a month when many retailers reported dismal results, McDonald's same-store sales in November jumped 4.5% in the U.S. and nearly 8% globally.

McDonald's dollar menu helped the chain see same-store sales jump 4.5% in the U.S.
McDonald's dollar menu helped the chain see same-store sales jump 4.5% in the U.S.
The chain credited breakfast, chicken and its dollar menu for the impressive gains. The "continued strong performance reflects the benefits of our multidimensional approach," CEO Jim Skinner said in a statement. "Convenient locations, extended hours and quality food at an outstanding value are all reasons why people are choosing McDonald's."

The chain has continued to post strong sales in a tough economy, with third-quarter same-store sales up 4.7%, a level roughly double that of the fast-food industry as a whole. For Wendy's, third-quarter same-store sales were down 1.2%, while Starbucks has warned that its same-store sales are continuing to decline into the high single-digit range. Burger King has fared better than most, with third-quarter U.S. same-store sales up 3%.

Subway on the right track
But it is clearly value that's reigning supreme. Subway, a closely held private company, is raking in double-digit same-store sales this year, thanks to its $5 foot-long sandwich promotion.

UBS analyst David Palmer wrote in a research note that McDonald's performance was particularly impressive given the dearth of new product and marketing news, as well as "a diminishing beverage lift in the U.S." He maintains that that the Golden Arches will continue to grow.

The chain's "combination of media weight, top-notch assets, compelling value tiers, brand momentum and platform innovation should continue to drive solid sales," Mr. Palmer said. "These assets helped McDonald's double industry growth lately, and these recent sales trends support our view that McDonald's has become less 'discretionary' than staple companies selling salty snacks or carbonated beverages."

In this article:
Most Popular