Shop Talk

Retailers, consumers and prices

Check Out Line: Sales strength back at U.S. golden arches

August 8, 2008

arches.jpgCheck out the strong sales at McDonald’s in the … United States?
The world’s biggest restaurant chain posted its largest monthly U.S. same-store sales gain since February, when Leap year added an extra selling day. Barring the Leap year, July was the best month in 11 months.
It seems like only a few months ago people were worried that cash-strapped U.S. consumers would start shunning restaurants altogether, even the less expensive ones like McDonald’s.
In fact, it was. The company posted a drop in U.S. same-store sales in March, the first such decline in five years.
But the U.S. rebounded and strength in U.S. sales in July is a sign that the company is benefiting as consumers trade down from casual-dining restaurants like Red Lobster and Applebee’s, and that the value message of McDonald’s is attracting customers, analysts said.
Growth in high-margin items like drinks could also help the company offset rising hamburger commodity prices, UBS restaurant analyst David Palmer said in a research note.
Also in the basket:
Hormel gives lower 3rd-qtr view; cuts ’08 outlook
Rising grain costs hit consumers (Wall Street Journal, subscription required)

(Photo: Reuters)

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