McDonald’s Corporation’s (MCD) comparable sales for November 2009 showed sluggish growth of 0.7% as against a rise of 7.7% in the same month last year, exposing its sensitivity to rising unemployment, the economic downturn and the discount war among fast-food chains to lure consumers.
The company faces stiff competition from Burger King Holdings Inc. (BKC), Wendy’s/Arby’s Group, Inc. (WEN) and Yum! Brands Inc. (YUM). However, these quick-service operators are faring better than casual dining restaurant chains, such as Cosi Inc. (COSI) and Red Robin Gourmet Burgers Inc. (RRGB), as cash-strapped consumers are trading towards fast-food centers due to relatively cheap dining options.
System-wide sales at McDonald’s worldwide restaurants climbed 10.1% in November. However, in constant currencies, the rate of increase in system-wide sales dipped to 2.3%.
In the United States, comparable sales dropped for the second straight month. Comps dipped to 0.6% in November (versus a 4.5% increase last year for the comparable month) after falling 0.1% in October. However, the month’s result fared better than the overall quick-service restaurant industry. Value-menu items and premium menu options continued to support the month’s results.
In Europe, comparable sales climbed 2.5% in November (versus a 7.8% increase last year for the comparable month) fueled by strong performance in the U.K. and France, partially offset by performance in Germany. Sustained focus on fourth-tier items development, premium menu options, and daypart expansion contributed to sales.
Comparable sales in Asia/Pacific, Middle East and Africa (APMEA) dropped marginally by 1% in November (versus a 13.2% increase last year for the comparable month) reflecting weakness across Japan and China, but partly offset by Australia.
Read the full analyst report on “MCD”
Read the full analyst report on “BKC”
Read the full analyst report on “WEN”
Read the full analyst report on “YUM”
Read the full analyst report on “COSI”
Read the full analyst report on “RRGB”
Zacks Investment Research
