Big Mac and Breakfast Increase Sales

Big Mac, Breakfast Items
Boosts McDonald's Sales
By SHARA TIBKEN
August 8, 2008 3:53 p.m.
Wall Street Journal
http://online.wsj.com/article/SB121819727618524003.html?mod=djkeyword

McDonald's Corp. reported an 8% increase in July global same-store sales as results increased across all regions, including 6.7% in the U.S. due to a focus on breakfast, chicken, beverages and the Big Mac sandwich.

McDonald's shares rose $4.07, or 6.6%, to $65.93 in Friday trading.

European same-store sales rose 7.6% due to strong results in France, the U.K. and Russia. The company said locally relevant summer offerings appealed to customers during the month.


McDonald's Corp.
Big Mac sandwich
The company's Asia-Pacific, Middle East and Africa region saw 7.2% growth, driven by extended hours and menu variety, especially in Australia and China. Latin America saw double-digit gains.

Same-store sales is a key indicator of restaurant performance because it measures growth at existing locations rather than newly opened ones.

In March, McDonald's reported same-store sales in the U.S. fell for the first time in five years, but the company has posted solid increases since then. The overall restaurant sector in the U.S. has been hurt by high gasoline and food prices, as well as by the slumping housing market and credit crisis.

Soaring commodity costs have forced some McDonald's franchises to re-evaluate pricing, including for the popular Dollar Menu offerings. But McDonald's has been benefitting from new menu items, expanded hours and the tendency of cash-strapped consumers to "trade down" from more pricey eating-out options in the U.S.

Overseas, it is benefiting from expansion and internal growth in key markets like Australia, China and Japan while getting the currency benefits of the sagging U.S. dollar.

Systemwide sales rose 16% world-wide, or 9.5% in constant currency.

Copyright © 2008 Associated Press