McDonald’s bet on “value-priced” burgers and specialty coffee paid off as the company’s third quarter profits rose 11%.
Global comparable-store sales for the chain also rose 7.1% and U.S. comp-store sales were up 4.7%, per the company’s earnings report released today.
“As we enter the final quarter of the year, October sales trends remain strong and I am optimistic about McDonald’s outlook,” CEO Jim Skinner said in a written statement.
Darren Tristano, evp at Technomic, Chicago, said McDonald’s is well positioned to weather the economic downturn. “Instead of spending money at casual dining chains, [consumers] are going to McDonald’s,” he said. Tristano said in addition to value propositions like $1 cheeseburgers and the chain’s continued success with gourmet coffee, McDonald’s is gaining customers with redesigned outlets.
In 2007, approximately half of the company’s nearly 14,000 U.S. restaurants had received some form of re-imaging, according to the company. For some, that includes Wi-Fi service and dimmer, more Starbucks-like lighting and muted colors.
“It’s a more contemporary design,” said Tristano. “No more plastic seats.”
The latest quarter continues a winning streak for McDonald’s. The chain posted a 6.1% sales gain in 2007 to nearly $29 billion, per Technomic. The company, whose lead agency is DDB, Chicago, also spent $769.9 million in U.S. media that year (excluding online), per Nielsen Monitor-Plus.