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McDonald’s scores big with 2-prong pricing

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Aggressive discontinuing and simultaneous promotion of a new premium sandwich line added momentum during the second quarter to McDonald’s turnaround, with same-store sales for U.S. restaurants rising 3.9%.

Comparable sales for branches outside the U.S. rose 6.6% on an increase in traffic, the best results for the brand in five years, said CEO Steve Easterbrook.

McDonald’s attributed its strong domestic performance to a nationwide discount during the three-month period on cold drinks and the launch of a new sandwich line, Signature Crafted.

The price of sodas was dropped to about $1. Around the same time, McDonald’s added the new premium-priced sandwiches, which patrons can customize by specifying which type of patty, bun and toppings they’d prefer.

The franchisor’s refranchising program cut into revenues. A $131.7 million gain in fees and payments from franchisees failed to offset a $347 million drop in sales from company-operated restaurants, a 9% decline. Overall, revenues slipped by 3%, to $6 billion.

Net income rose by 28%, to about $1.4 billion.

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