Retailers, consumers and prices
Check out profits rising at McDonald’s, the world’s largest hamburger chain.
But while profits rose, the results showed the chain’s U.S. business continued to lag its international operations. U.S. same-store sales rose 1 percent in December, after two months of declines. Globally, same-store sales rose 2.3 percent for the quarter and 2.7 percent in December.
At home, McDonald’s is facing competition from fast-food chains like Taco Bell and Burger King. While McDonald’s is well known for its Dollar Menu, which features the $1 sausage burrito and $1 McDouble burger, rivals are now using low prices — like Burger King’s offer of a 1/4-pound double cheeseburger for $1 — to lure diners.
At the same time, some consumers recently have returned to more upscale chains like Panera Bread and Starbucks — leading some analysts to say that fast-food chains are now in for a period of sinking sales and rampant discounting, the likes of which hobbled pricier restaurants for much of the recession.
Check out sluggish results in the U.S. food sector.
Fast food giant McDonald’s and Kroger, the largest U.S. grocery chain, saw shares decline 2.5 percent and 10 percent, respectively, after reporting weak results.
McDonald’s said same-store sales at its U.S. restaurants slipped 0.6 percent in November, marking the second straight monthly decline. Following Yum Brands’ recent weaker-than-expected sales, it was the latest sign that the fast-food sector that had performed well through most of the recession was weakening.
Check out this morning’s lineup of quarterly results.
Meanwhile, cigarette makers Philip Morris International and Reynolds American topped expectations and raised their full-year forecasts.
In its battle to end the myth of the $4 Starbucks coffee — the world’s biggest cafe chain is offering tips on how to save money in its cafes, which are lowering prices on some beverages as they battle market newcomer McDonald’s.
On her way to work in downtown Los Angeles, banker Teresa Roman recently picked up a large iced vanilla coffee. Her cup had no green mermaid, the iconic Starbucks symbol. Instead, it displayed McDonald’s famed golden arches.
Roman switched from Starbucks iced coffee to McDonald’s when the fast-food giant started selling lattes, mochas and cappuccinos as part of its McCafe beverage expansion that launched officially earlier this year.
Gary Severson, Wal-Mart U.S.’s senior vice president of home entertainment, told Reuters he thought the deal represented a “screaming value.”
“In the United States, there is some argument to say that these green sprouts that are showing relative to economic growth are pointing to the fact that we might have (hit) bottom and now it’s starting to grow.
Check out those sales rising at fast-food giant McDonald’s.
The burger chain said its April sales at restaurants open at least 13 months rose 6.9 percent rise in April. In the U.S. alone, April same-store sales increased 6.1 percent, helped by new coffee drinks and chicken snack wraps.
Fast-food restaurants have generally held up better in the recession than higher-priced sit-down restaurants.
Starbucks wants you to know that it is not the home of $4 coffee, and it’s launching a multimillion-dollar ad campaign to make sure you get the message that its brew is not an expensive luxury.
“Starbucks coffee does not cost $4,” Chief Executive Howard Schultz said this week when he announced the new ad blitz. The ad at left will run on Sunday in the New York Times.
McDonald’s, the world’s largest hamburger chain, posted a higher quarterly profit that beat analysts’ expectations.
It also said April same-store sales were trending at least as strong or better than first-quarter sales in every part of the world.