McDonald’s sales rise on Asian demand

City A.M. Reporter
MCDONALD’S reported a better-than-expected 4.8 per cent rise in February sales at established restaurants as Asia helped offset softness in the US?and Europe.

New menu items, Olympic sponsorships and the company’s introduction of a $1 breakfast value menu in the US helped the world’s biggest hamburger chain surpass forecasts for same-store sales growth of 3.9 per cent.

Sales at restaurants open at least 13 months rose 0.6 per cent in the US, 5.4 per cent in Europe, and 10.5 per cent in the Asia/Pacific, Middle East and Africa region (APMEA).

Chinese New Year celebrations, which fell in February this year versus January in 2009, helped lift results in APMEA, which has been a bright spot for McDonald’s since the US slipped into recession in 2007.

While heavy snow, high unemployment and rampant discounting weighed on the chain’s domestic results in February, the company did manage to eke out what is increasingly becoming a rarity -- positive domestic same-store sales.

“This growth is impressive given continued high unemployment and the promotional environment,” said David Tarantino, an analyst at Robert W Baird.

McDonald’s and some other fast-food chains initially benefited when the global economic downturn sent US diners to lower-priced fare.

But that so-called trade-down effect is no longer strong enough to offset a spending retreat by young men, who are big consumers of fast food.


• Chinese New Year celebrations helped boost McDonald’s profits in Asia
• Initially, the recession boosted McDonald’s, with consumers trading down. But that effect has tapered off recently.