After losing market share and faced with falling sales, McDonald’s has turned the tables on its competitors in Quick Service Restaurants (QSRs) and in the broader restaurant category, including the Informal Eating Out (IEO) segment, with the its latest solid sales results driven by the introduction of all day breakfast.
Part of a wider transformation plan, the introduction of its all day breakfast menu across the US in October has proved successful, with fourth quarter comparable sales in the US up by 5.7 per cent. The rollout of McDonald’s extended breakfast offering was among several initiatives undertaken by the burger giant last year after McDonald’s president and CEO, Steve Easterbrook, said the company needed to take “bold, urgent action to reset the business and position McDonald’s to deliver sustained profitable growth”.
This strategy has delivered strong results for the company so far, with McDonalds recording a 5 per cent increase in global comparable sales for the quarter ended December 31, 2015. Global comparable sales for the year ended 2015 were up 1.5 per cent and comparable sales for the international lead segment increased 4.2 per cent for the quarter, led by strong performances in Australia, the UK and Canada.
“We ended the year with momentum, including positive comparable sales across all segments for both the quarter and the year – a testament to the swift changes we made and the early impact of our turnaround efforts. We enter 2016 committed to managing the business for the long term and aligned as a system around the critical imperative that we must run great restaurants each and every day for our valued customers,” Easterbrook said.
Despite the success of its extended breakfast menu, McDonald’s says that this is not a “single initiative turnaround plan” and it will continue to invest in a range of other initiatives including food quality and the development of its value platform.Continuing reinvestment in the fabric of McDonald’s restaurants is expected to see the in store experience continue to improve while operational improvements in drive through order accuracy are also paying dividends. McDonald’s said a reduction in staff turnover has also been achieved in the early days of new initiatives. Easterbrook said the company is expecting positive top-line momentum across all segments throughout 2016.
“We are demonstrating that our turnaround plan is key to restarting growth and becoming a modern and progressive burger company,” he said.