A winning formula: treats for tough times

YESTERDAY, the Liberal Democrat deputy Prime Minister Nick Clegg was out posing for the cameras at a McDonald’s training facility in East Finchley. Two or three years ago, such a photo shoot would have been unimaginable. The fast-food giant, a bête noire of the chattering classes, was seen as politically toxic and blamed for everything from childhood obesity to global warming. How times have changed. As one of the only companies creating large numbers of jobs, politicians can no longer afford to snub this purveyor of burgers and fries.

McDonald’s is one of those rare things: a truly counter-cyclical stock. During the boom years, its star waned as customers sought out more expensive alternatives; its stock touched an eight-year-low in 2003. But as the recession has bitten, the McDonald’s offering of cheap treats has struck a chord; since the start of 2008, its stock price has jumped by 42 per cent. Unlike other firms toughing out the slump, it is growing its sales more quickly in mature markets such as Europe and the US, where like-for-like sales jumped by 7.3 per cent and 7.1 per cent respectively.

December sales were even more impressive, with like-for-like revenues growing by 9.8 per cent in the US and 10.1 per cent in Europe (whoever said the Continentals hated Big Macs?). Revenues in its sprawling Asia-Pacific Middle East and Africa region grew at a slower rate of 6.5 per cent.

There is much rubbish written about McDonald’s transformation from fast food joint to salad-bar-cum-coffee-shop.

The real change is its so-called “fourth-tier menu”, corporate speak for smaller portions of high-calorie treats like a handful of chicken nuggets or a mini beef burger. Such products allow customers to indulge while spending less, and feeling less guilty. Who can blame them?