McDonald's said a key sales figure climbed 3.7 per cent in August, as the fast-food chain emphasized the value of its menu offerings amid the challenging global economy.
The world's biggest hamburger chain's strongest performance came from the region encompassing Asia, the Middle East and Africa, with revenue at stores open at least 13 months up 5.7 per cent.
The Oak Brook, Illinoisbased company said Tuesday the increase in that region was fueled by a shift in the timing of Ramadan, the monthlong observance during which Muslims fast during daylight hours. Ramadan ran from late July to mid-August this year. It had fallen entirely in August last year. Strong results in Australia and China also helped.
In the U.S., the company said its breakfast menu and value items pushed up sales by three per cent. Last month, the figure had dipped 0.1 per cent after the company said its promotions failed to drive growth.
McDonald's has intensified its focus on value, said Jefferies analyst Andy Barish. In the U.S., for example, he noted that McDonald's ran promotions for its breakfast Dollar Menu in mid-August.
In Europe, which is McDonald's biggest market and accounts for 40 per cent of its business, the figure rose 3.1 per cent on strength in the U.K., France and Russia. The company said its sponsorship of the London Olympics helped lift results. Another strong contributor was its Coke Glass promotion, in which customers got a free glass and wristband when they bought an extra value meal or premium salad.
The overall results for the month were offset by weakness in Japan, Germany and parts of southern Europe that have been hit by austerity measures.
In such hard-hit regions, McDonald's has been working to underscore the value of its meals to lure consumers to eat out more often. In the U.S., the company plans to continue mixing up its menu with new items. And in Asia, the company has said it will boost traffic by offering "convenience enhancements," such as delivery.
Sales at all the company's restaurants rose 1.2 per cent for the month. McDonald's, which has more than 33,500 locations around the world, is often seen as a bellwether for the industry.
The increase in August follows a disappointing showing in July, when the figure came in flat. That was the worst showing in more than nine years; the last time the figure dipped for McDonald's was in April 2003.
After years of outperforming its rivals, analysts say McDonald's could be heading into a period of slower growth. The company is also facing increasing competition, with Burger King and Wendy's working to revive brands.
