What is in this article?:
- McDonaldâ€™s operator survey suggests same-store sales lift
- 'Maxed out' in the U.S.
Franchisees also express dissatisfaction with the chain's coffee giveaway, menu changes and plans for unit growth.
McDonald’s franchisees surveyed by Janney Capital Markets projected same-store sales to grow slightly in March and April, though the operators’ outlook for their businesses over the near term and their appraisal of the relationship with McDonald’s Corp. have improved little from a similar survey three months ago.
Many of the 27 owner-operators surveyed said favorable calendar shifts that yielded five weekends in March and moved Easter into April helped them report positive same-store sales. The 27 franchisees collectively operate 86 restaurants in McDonald’s East division, 44 units in the Central division and 89 locations in the West division.
Janney’s survey aimed to estimate McDonald’s same-store sales result for the first quarter, which the brand will report with its quarterly earnings on April 22. Collectively, the operators who were polled reported a 0.6-percent increase in same-store sales in March, with the East division leading the way with a 1.3-percent increase, offset by flat same-store sales in the West division and a 0.4-percent uptick in the Central division. They gave more optimistic projections for April, estimating a collective 1.5-percent increase.
Mark Kalinowski, securities analyst for Janney Capital Markets and the author of the McDonald’s Franchise Operators Survey, noted that the respondents’ same-store sales projections for March and April were 0.9 percent and 1.2 percent, respectively, above the consensus estimates for McDonald’s monthly sales on Wall Street.
Oak Brook, Ill.-based McDonald’s Corp. reported same-store sales decreases of 3.8 percent, 3.3 percent and 1.4 percent, respectively, this past December, January and February in the United States. The company does not comment on Janney’s franchisee survey because it is published in the days preceding McDonald’s reporting of quarterly earnings, when the company is in a mandated quiet period.
Several of the franchisees reported anonymously to Kalinowski that McDonald’s most recent two-week breakfast promotion to give away free McCafe coffees — a response to the threat posed by Taco Bell’s introduction of breakfast — was another in a long line of ideas that failed to drive sales.
“Giving away free coffee — what a brilliant, creative idea from the geniuses in Oak Brook,” one franchisee sarcastically told Kalinowski.
Other comments reprised familiar themes from the other recent operator surveys from Janney, such as a menu that has become too complex for both employees and customers, causing major delays for service times.
Janney has previously conducted the McDonald’s Franchise Operator Survey 61 times and has predicted actual same-store sales results within 1 percent 40 times of those times and within 2 percent 55 times.