McDonald’s sales skyrocket thanks to higher prices in the US, new menu items, Retail News, AND Retail

Higher prices in the United States and celebrity-themed meals boosted McDonald’s Corp’s comparable quarterly sales, although the company struggled to keep restaurants open at capacity due to labor shortages. work and outbreaks of COVID-19, he reported on Wednesday.

Comparable store sales in the United States were up 9.6% in the third quarter ended Sept. 30, compared to estimates of 8.27%, according to data from Refinitiv IBES.

Global comparable sales also jumped 12.7% in the quarter from estimates of 10.31% as international markets slowly recover from the pandemic.

Shares of the world’s largest burger chain rose about 2.2% to $ 241.70 by late morning.

The labor shortage in the United States has caused some sites to be closed prematurely and service to slow down, chief executive Chris Kempczinski said on a call for results, adding that the problems were not “insoluble”.

McDonald’s had to delay opening new restaurants until early 2022 in part because problems in the global supply chain made it difficult to obtain kitchen equipment and technology. This caused the development of new units in the United States and some international markets to be “a little lower” than the number the company had planned to open this year, Kempczinski said.

Rest areas have remained closed at about 20% of U.S. McDonald’s establishments – about 3,000 restaurants – in areas with high COVID-19 rates.

Despite this, some restrictions related to the pandemic have eased, attracting more customers to restaurants. McDonald’s crispy chicken sandwich and the latest celebrity partnership and rapper Saweetie also boosted sales.

The Chicago-based company also increased U.S. prices by about 6% from 2020 to help cover rising raw material and labor costs. Higher prices, combined with larger orders, boosted sales.

Most restaurant chains, including Chipotle Mexican Grill Inc, charge more on menus to protect their margins against higher costs for everything from payroll to beef and chicken.

McDonald’s expects comparable sales in the United States for the current quarter to show weak double-digit growth over two years.

The fast food chain, which was looking to increase sales digitally, has launched a new loyalty program in the United States that now has more than 21 million registered members, while also doubling up on advertising.

Most of the company’s international markets have also returned to sales growth, particularly in the UK, Canada and Japan, as coronavirus restrictions eased, while sales in Australia and China continued to be under pressure by the resurgence of COVID-19 cases.

Kempczinski said IBM Corp will acquire McD Tech Labs, which was established after McDonald’s acquisition in 2019 of Apprente, an artificial intelligence company working on the automation of steering wheel controls.

Net income rose 22% to $ 2.15 billion and the company earned $ 2.76 per share on an adjusted basis, beating estimates of $ 2.46 per share.

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