Quick-service brand says breakfast is still challenged, as well as guest counts; same-store sales declined 5.1% in May
Same-store sales at McDonald’s restaurants in the U.S. are improving though the brand continues to be hampered by a slowdown at breakfast and negative guest counts.
In a business update announced Tuesday morning, the Chicago-based chain said same-store sales in the U.S. were down 12% for the partial second quarter, which covers April and May; however, for the month of May, declines improved to a decrease of 5.1%. To date, the company has reopened dining rooms at 1,000 restaurants with limited capacity. Most of them are located in rural and suburban communities.
About 95% of McDonald’s restaurants around the world are open, up from 75% at the end of April.
Same-store sales worldwide declined 29.8% for the partial second quarter.
Chief Executive Officer Chris Kempczinski, who plans to discuss the business update later this morning during the Evercore ISI Virtual Consumer & Retail Summit, said the company’s robust drive-thru and delivery operations have given the brand a “unique” advantage amid the coronavirus pandemic.
“I am confident in our ability to manage through the immediate challenges and emerge from this pandemic in a position of competitive strength,” Kempczinski said in a statement. “The steps we are taking in response to the pandemic and to accelerate recovery, while continuing to serve the great and familiar taste of a meal from McDonald’s, will position us well for the next phase of this crisis.”
He went on to thank the entire McDonald’s system for their “continued dedication to serving customers safely and the countless other ways in which they support our communities.”
In terms of franchisee support, McDonald's has spent about $200 million in advertising around the world to promote restaurants; half of those funds were spent on advertising campaigns in the U.S. The company is also providing targeted support to individual franchisees based on their financial situation.
In a research note released Monday, analyst Mark Kalinowski said “McDonald’s U.S. same-store sales trends have rebounded” and could turn positive in June. Kalinowski said key drivers for the brand are the strength and convenience of its drive thru restaurants and the company’s efforts to speed up drive thru service times.
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