Business is good for a change under the Golden Arches:
McDonald’s Corp (MCD.N) reported better-than-expected quarterly same-restaurant sales as the launch of all-day breakfasts proved to be a hit with diners in the United States and demand continued to recover in China.
The world’s biggest restaurant chain’s shares jumped 3.4 percent in premarket trading on Monday.
McDonald’s introduced all-day breakfasts in October in the United States, allowing customers to tuck into its popular Egg McMuffins and Hash Browns any time of the day.
The move was aimed at countering increasing competition from chains such as Wendy’s Co (WEN.O), Starbucks Corp (SBUX.O) and Burger King (QSR.TO), which have been doubling down on their breakfast offerings.
McDonald’s returned to sales growth in the United States in its third quarter after two years of no growth, following new Chief Executive Steve Easterbrook’s turnaround plan that included cutting down on menu items, improving delivery times and refranchising more restaurants.
Adding breakfast items to the all-day menu has been good for business, but not-so-good for franchisee relations. Although he have to suspect that franchisees will grow less angry about the inconvenience and extra equipment they had to install, now that sales are going up again.
That said, all-day breakfast is a one-trick pony. Now that it’s done, it’s done — and won’t be adding much more to the bottom line. What remains is the more important task of simplifying the menu, improving quality to help compete with fast casual chains, and — at the risk of repeating myself — putting the beef tallow back into the fryers so the french fries taste like food again.
There’s nothing worse than sitting down with a cardboard container filled with limp, soggy sticks that taste like vegetable oil.