McDonald’s says Cheap Eats Helped Lift Sales
Cheap eats and new menu items helped McDonald’s boost a key sales figure in May, bouncing back from a decline the previous month.
The world’s biggest hamburger chain said Monday that global sales rose 2.6 percent at restaurants open at least a year, helped by an extra Friday in the month. In the U.S., the figure rose 2.4 percent, as the Dollar Menu and its new chicken wraps and egg white breakfast sandwiches lifted results.
In Europe, the figure rose 2 percent, as declines in Germany and France were offset by strong results in the United Kingdom and Russia.
The figure edged up 0.9 percent in the region encompassing Asia, the Middle East and Africa. The company, which as more than 34,000 restaurants around the world, noted that results in China were negative because of fears about avian flu.
McDonald’s Corp. based in Oak Brook, Ill., has been struggling to increase sales as it faces changing eating habits and weak growth in the broader restaurant industry. Late last year, the company reported a decline in the monthly sales figure for the first time in nearly a decade. Soon after, it ousted the head of its U.S. division and renewed its focus on value and refreshing its menu.
McDonald’s is facing battles on different fronts. It’s fighting for price-conscious customers, but it’s also trying to cater to those who want healthier, fresher choices. In response, it has been rolling out menu changes that aim to attract different customers. Although prices vary in different markets, the menu items can range from $1 for a grilled onion cheddar burger to $7.79 for a grilled chicken sandwich with a drink and fries.
Specifically, the company is trying to attract customers by touting its Dollar Menu and other promotions, such as two Big Macs for the price of one. Some analysts say the strategy is bad for profit margins but the company says it’s necessary to steal market share, given the weak growth in the broader restaurant industry.