McDonald’s increased traffic counts drive strong Q4 resultsMcDonald’s increased traffic counts drive strong Q4 results

Alicia Kelso

That McRib Farewell Tour and the Cactus Plant Flea Market collaboration seem to have created quite the buzz for McDonald’s. Well, that and an increasingly uncertain macroenvironment.

The Golden Arches reported Q4 earnings Tuesday morning, including a 10.3% comp sales increase in the U.S. and a traffic increase of 5% systemwide. These numbers topped Wall Street estimates. The company attributed its domestic sales results to strategic menu price increases, successful marketing campaigns such as the Cactus Plant Flea Market promotion and McRib Farewell Tour, and continued digital and delivery growth. The company’s digital sales mix represented more than 35% of systemwide sales in the company’s top six markets, including the U.S., compared to over 30% in Q3.

The company also cited positive guest counts as a driver, bucking the overall industry trend of declining traffic as consumers grow increasingly inflation-weary and signaling that those consumers are likely trading down to the QSR giant from traditionally higher-ticket fast casual and casual dining concepts. In Q4, restaurant industry traffic overall was down 4.2%, according to Revenue Management Solutions.

According to Placer.ai data, visits to McDonald’s were up 26.2% in Q4 2022 versus Q4 2019, and up almost 30% year-over-year.

Related:McDonald's teases another farewell tour for the McRib

The Cactus Plant Flea Market promotion was launched in late September and the collaboration with the streetwear brand generated a significant uptick in traffic in October, according to Placer.ai. The company teased the McRib’s “Farewell Tour” in late October. These promotions are part of what the company has called its “marketing war chest” aimed at appealing to younger consumers and taking more market share. The chain’s marketing cadence has been wildly successful throughout the past two years due in large part to its Famous Orders promotion featuring curated meals from celebrities like Travis Scott, BTS, Saweetie and others.

As part of its Accelerating the Arches 2.0 initiative, the company plans to push the gas on its marketing strategy. It will also continue to prioritize digital sales, including through its loyalty program, first launched in 2021. 

In a statement, CEO Chris Kempczinski said, “Our Accelerating the Arches strategy is driving growth and building brand strength, delivering exceptional full year performance in 2022 with over 10% comparable sales growth and 5% comparable guest count growth globally. While we expect short-term inflationary pressures to continue in 2023, we remain highly confident in Accelerating the Arches, which now includes a greater emphasis on new restaurant openings.”

Kempczinski added that the recently announced Accelerating the Organization initiative will complement this strategy to enable the McDonald's system to be “faster, more innovative, and more efficient.” The initiative was announced earlier this month and includes an anticipated corporate restructuring and “evaluation of roles” to happen by early April.

McDonald’s also reported full year 2022 results, including a 5.9% increase in U.S. comp sales (10.9% systemwide increase).

Contact Alicia Kelso at [email protected]