Wednesday, July 27, 2016

McDonald’s Quarterly Sales Show It Can’t Ride All-Day Breakfast Wave Forever

When McDonald’s finally introduced an all-day breakfast menu in October 2015, the fast food chain quickly began announcing the exciting results of its decision: sales went up for the first time in two years and customers were flocking back to the chain. Fun times can’t last forever, however.

During a call with McDonald’s investors, the company said that sales slowed quite a bit in the latest quarter, even though it was also the fourth consecutive quarter of positive sales at the chain’s stores that have been open at least a year, The Wall Street Journal reports.

The news means McDonald’s should probably have something big up its sleeves to reveal soon, if it wants to keep investors happy. To that end, the company won’t say exactly what it’s planning, but it has been testing a few new products in some markets: Chicken McNuggets sans artificial preservatives, Big Macs that have been supersized and Big Macs that have been shrunken, and Quarter Pounders made with fresh beef instead of frozen patties.

On the service side, the chain is trying out self-serve kiosks, and the option to order ahead with an app for curbside pickup.

“Clearly, we plan to grow our business. But at the same time, we’re not trying to do that on a quarter-to-quarter-to-quarter basis,” McDonald’s Chief Executive Steve Easterbrook told investors, saying he had expected the boost from all-day breakfast to simmer down after its initial success. He says the company will get another uptick int he fall when more breakfast items hit the all-day menu nationwide.

Another factor? People are packing their lunches instead of eating out during the day amid economic uncertainties, leading less growth in the restaurant industry in general.

“First of all, there is a widening gap between food away from home and food at home…so that’s a small part of it. I think generally there is just a broader level of uncertainty in consumers’ minds at the moment, both trying to gauge their financial security going forward,” he said. “Whether through elections or through local events, people are slightly mindful of an unsettled world. When people aren’t certain, when families are uncertain, caution starts to prevail and they start to hold back on spend.”

At McDonald’s, All-Day Breakfast Cools [The Wall Street Journal]


by Mary Beth Quirk via Consumerist

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