• by Karlene Lukovitz  @KLmarketdaily, September 10, 2008

While survey upon survey shows cash-squeezed Americans reporting that they are eating out less often, it's for sure that many are still hitting McD's.

 

Just-released August data show comparable sales for U.S. restaurants owned by McDonald's Corp. were up 4.5% versus August 2007, and August '07 comparable sales were up 7.4% over 2006.

Year-to-date, the corporate U.S. restaurants are up 3.8% in comparable sales (last year, they were up 5% as of the first eight months).

In addition, system-wide U.S. sales--which include sales at all restaurants, including those operated by the corporation plus its franchisees and affiliates--rose 5.4% in August and 4.7% year-to-date.

McDonald's attributed the U.S. August growth to its "popular breakfast menu, the Olympic-themed Southern style chicken sandwich and biscuit promotion, and every-day affordability, with a special focus on beverages."

Meanwhile, in constant-currency terms, global comparable corporate sales grew 8.5% in August and 7.1% year-to-date, and global system-wide sales jumped 10% in August and 8.6% YTD.

In Europe, McDonald's has been seeing strong performance in nearly every market, resulting in an 11.6% comparable sales increase in August and 9.3% lift YTD for corporate restaurants. European system-wide sales jumped 13.5% in August and 11% YTD. McDonald's cited menu variety and marketing as contributors to growth in this region.

In Asia-Pacific, the Middle East and Africa, comparable corporate sales rose 10% in August and 9% YTD, while system-wide sales rose 12.8% in August and 11.6% YTD. In addition to "continuing momentum" in most of these markets, including Australia, Japan and China, McDonald's realized gains from extended hours and Olympics-related marketing encompassing local menu choice.

None of this is actually surprising, considering McDonald's track record and strategy, says Bob Goldin, executive VP of Technomic, Inc., a research and consulting firm serving restaurants and food suppliers. "McDonald's has been on a roll for at least five or six years now in terms of same-store sales, profitability, you name it-- although this kind of performance in the current environment is obviously particularly terrific," he says.

Goldin attributes the mega-chain's continuing success to a combination of factors, rather than a few dominant or recent moves.

"They continue to excel by doing what you might call a lot of consistent blocking and tackling," he says. "They offer value, of course, starting with the Dollar Menu that's their anchor and including specials, such as the one they're running now, at least in the Midwest, for two Egg McMuffins for $3.

"They're huge on convenience--they're open early and late and they have a large number of drive-ins. Their promotional and advertising activities continue to be very effective, as with those surrounding their Olympics sponsorship." The premium/specialty coffees initiative "hasn't hurt," either, he adds.

Asked about the potential impact if McDonald's decides to change its extremely popular $1 double cheeseburger or replace it with another item--moves that management has acknowledged are under consideration--Goldin says he's confident that McDonald's will make sure that the change, if any, will be very much in line with "consumers' value expectations."