McDonald's sales top forecasts after promotions push

One-dollar drinks and the McPick 2 for US$5 (S$7) deal helped McDonald's bigger-than-expected jump in quarterly US comparable sales.

UNITED STATES (REUTERS) - US$1 (S$1.36) drinks and the McPick 2 for US$5 deal helped McDonald's beat Wall Street expectations in the third quarter.

US same-store sales rose more than expected. Global comparable sales topped forecasts as well.

McDonald's has been working on reversing lower traffic at its US restaurants, where it gets most of its profit.

It added new items to its menu, such as the fresh beef Quarter Pounder and Signature Sriracha sandwich. It also started mobile ordering and delivery.

 

"Do not underestimate the ability of well-capitalised franchises to do well. They can put money to bear that a lot of other small time guys just can't do starting out. Someone with only 100 shops across the country just can't do what McDonald's did. If McDonald's wants to fix a problem, they can bring in an unbelievable amount of human and financial capital to bear, and that's what they're doing right now." said Cary Leahey, Senior Adviser, Chief US Economist, Decision Economics. 

 

McDonald's has been under pressure from chains, like Chipotle and Panera Bread, to give its customers more options. Its rivals, Wendy's and Burger King, have also been improving their offers.

McDonald's shares, which had risen four percent this month, were up in early trading on Tuesday.