McDonald’s Corp. reported comparable U.S. store sales rose 3.7 percent during the second quarter, a bright spot in an otherwise grim time for the restaurant industry.
Analysts deemed McDonald’s quarterly results mildly disappointing. But the world’s largest restaurant chain has held up better than most rivals as the economy struggles and consumers seek out cheaper dining options.
This spring, the number of quick service restaurants in the U.S. fell 1% from a year earlier, to 306,127, according to results of an NPD Group survey released earlier this month. Visits to U.S. restaurants fell 3 percent during the 12 months ended May, compared with the same period a year earlier.
“It’s been a difficult time for the restaurant industry with customer traffic down over the past year,” Greg Starzynski, director with industry consultant NPD Group Inc., said in a July 20 news release.
Consumer spending at restaurants declined 1% during that period, NPD said, the first decline since the firm began tracking the foodservice industry in 1976.
“The unit losses we’re seeing in our latest census are a reflection of the weakness in the industry, with the greatest impact on the independent restaurant operators,” Starzynski said.
In recent months, persistently high unemployment and further erosion in the housing market have clouded the outlook for foodservice, a major consumer for beef, dairy and fresh produce industries.
McDonald’s buys about 120 million pounds of lettuce and salad greens, 28 million pounds of tomatoes and 1.5 billion pounds of frozen potato products every year for its U.S. operations, the company said previously.
But analysts attribute much of McDonald’s recent sales growth to newer menu items, such as gourmet coffees, and promotions.
“We continue to believe that frappes, smoothies, dollar drinks, and sweet tea continue to be drivers of domestic same-store sales” for McDonald’s, Mark Kalinowski, analyst with Janney Capital Markets, said in a report July 23.
McDonald’s 3.7% comparable store sales gain during the second quarter was a slight improvement over a 3.5% increase for the same period in 2009. The sales reflect stores open at least 13 months.
Net income during the quarter rose 13%, to $1.23 billion, while companywide revenue rose 5.3%, to $5.95 billion, McDonald’s said July 23.