McDonald’s has achieved its 42nd consecutive quarter of sales growth in the UK and said that its performance over the summer, and in particular demand for chicken products, helped it to deliver another strong quarter.
Paul Pomroy, chief executive, McDonald’s UK, said: “ Together with our franchisees, we have continued to invest in what matters most to our customers and our people; just over 600 restaurants have now been transformed as part of our multi-million pound refurbishment programme – representing half of our UK restaurant estate, and innovations such as table service, where people order via digital self-order kiosks with food brought to their table, and digital play zones, are making a big difference for families.
“This summer we saw an increasing demand for our chicken products, with Big Flavour Wraps including the grilled chicken option, Chicken Legends and Chicken Selects selling well. The warm weather also saw customers respond positively to our new BBQ Smokehouse burgers and range of Ice Fruit Smoothies and Frappes.
“As we head into the final quarter of the year, we will stay committed to offering great value and variety, as well as investing in our restaurants, our people and our menu to ensure our customers enjoy a great experience each and every time they visit.”
The strong UK performance helped to drive the company’s global like-for-likes up 3.5% in the quarter to 30 September 2016.
Chief executive Steve Easterbrook said: “Customers today are more informed and demand greater choice and variety when they dine out. That’s why we’re evolving the McDonald’s experience to provide more high-quality, affordable food and beverage options and convenient solutions for customers on the go. Our third-quarter results, including our fifth consecutive quarter of positive comparable sales across all segments as well as improved restaurant profitability, are a testament to the progress we are making to satisfy the needs of today’s dynamic customers.”
The company said that amidst continued industry softness, third-quarter comparable sales increased 1.3% in the US supported by All Day Breakfast, everyday value under the McPick 2 platform, and the introduction of Chicken McNuggets with no artificial preservatives.
US operating income for the quarter rose 8%, reflecting improved restaurant profitability and higher gains from refranchising.
Comparable sales for the group’s International Lead segment increased 3.3% for the quarter, reflecting strong sales in the UK and positive results in Australia, Canada and Germany. Third-quarter operating income for the segment increased 2% (5% in constant currencies) fuelled by sales-driven improvements in franchised margin dollars across most markets.
Third-quarter comparable sales increased 1.5% in the company’s High Growth segment as positive performance in nearly all markets was partially offset by negative comparable sales in China due, in part, to temporary protests related to events surrounding the South China Sea and comparison against very strong prior year results. The segment’s operating income rose 8% (10% in constant currencies) driven by improved restaurant profitability in China, which benefited from recent VAT reform.
Third-quarter comparable sales rose 10.1% in the Foundational markets, led by strong performance in Japan as well as solid results in each of the segment’s geographic regions. For the segment, which includes Corporate G&A and other costs, operating income for the quarter declined as Japan’s contribution to the segment’s bottom-line profitability was more than offset by the impact of strategic charges associated with the company’s global G&A and refranchising initiatives.
