McDonald's did more with less last quarter, boosting sales despite fewer diners
Snacks / Wednesday, October 23, 2019
We're concerned. But we're impressed... The number of people who went to McDonald's in the US last quarter — aka "foot traffic" — fell. Somehow McDonald's sales still rose 4.8%. Ronald squeezed more money out of each customer, ketchup-pouch style, and here's how:
- Higher prices: You dropped 3% more for a McSomething because McD's upped the menu prices (partly to cover higher paychecks because of city/state minimum wage increases).
- Tech: McD's acquired 3 tech companies in the past year, including one that adjusts the drive-thru menu based on weather. Hot day = McFlurries on 6 of the value meals.
- Promos: 2 for $5 Mix & Match. Buy 1 Big Mac, Get 1 Big Mac for $1. Bargains get your eyes ordering more than your stomach planned.
"Lower foot traffic" isn't part of McD's plan... The chain's huge $2.4B store renovation plan focuses on self-order kiosks and table service. That's meant to boost store traffic — but the opposite happened last quarter, so investors dropped shares 5% Tuesday. Our guess: Viral Popeyes vs. Chick-fil-A chicken sandwich wars temporarily attracted the Big Mac (un)faithfuls.
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