McDonald’s (MCD:NYSE) is the world’s largest restaurant company, and it just topped Wall Street’s estimates with a 2.6% climb in sales for the first month of 2010.
But the reason for the climb was not the U.S. economic recovery. In fact, sales declined in the U.S., and total sales for the company only rose due to demand in Asia and the U.K., according to Bloomberg.
The newswire reports:
McDonald’s introduced a $1 breakfast menu in January and added a wrap version of its Big Mac sandwich to revive U.S. sales hurt by a slowdown in consumer spending and poor weather in the first half of the month. Longer opening hours in the U.K. and France drove sales in those markets, and demand for breakfast and staples such as french fries added to sales in Australia and Japan.
The slowdown in the U.S. saw a drop of 0.7%, but that was more than offset by the 4.3% gains in both Europe and APMEA (Asia/Pacific, Middle East and Africa).
Reuters reports that most analysts were expecting an overall sales gain of 1.4%, which the company handily beat.
Interestingly, McDonald’s reported a 1% climb in sales for December, and a 0.1% climb in the fourth quarter of 2009.
In comparison, Burger King’s same-store sales for the calendar fourth quarter fell 3.3%.
Notably, Coca-Cola (KO:NYSE) saw a massive increase in its fourth-quarter profits…
MarketWatch’s William Spain reports, “Coca-Cola earned $1.54 billion, or 66 cents a share, in the period vs. $995 million, or 43 cents a share, in the same quarter a year ago.”
That’s a 55% jump…
Again, though, it was overseas sales that helped Coca-Cola climb so drastically.
In fact, unit case volume rose 8% in Brazil, 20% in India, and 29% in China. This is compared to the average unit case volume rise of 5% worldwide.
This may just further prove that the U.S. economy is still weak.
In the first months of the recession, fast food and soft drinks performed well. Places like McDonald’s got more business from folks opting out of more expensive sit-down restaurants.
But now, with McDonald’s seeing a drop in U.S. sales, and Coke seeing a drop of 4% for its North American revenue, these recessionary pressures have trickled all the way down to the “dollar menu.”
“Even though the economy grew at a solid pace in the fourth quarter and retail sales were fairly strong during the holidays,” says Paul La Monica for CNNMoney’s The Buzz, “consumers still don't appear to be confident enough to go back to their spendthrift ways – not even for relatively inexpensive creature comforts such as a Big Mac or six-packs of Coke Zero or Coors Light.”
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