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Digital orders and chicken sandwiches drove strong sales at McDonald's last year

U.S. same-store sales hit a record in 2021, driven in part by price increases and the company’s promotions, including its new loyalty program.
McDonald's 4Q sales
Photo courtesy of McDonald's

McDonald’s generated record same-store sales growth in the U.S. last year as consumers flocked to the company’s drive-thrus for chicken sandwiches and McRibs while franchisees raised prices. Yet earnings did not quite meet Wall Street expectations.

Same-store sales rose 13.8% domestically in 2021, the best, full-year domestic performance for the storied chain in its history, but driven in part by weak performance in 2020, when the pandemic wiped out sales in the spring and early summer. U.S. same-store sales increased 0.4% for the full year in 2020.

McDonald’s U.S. same-store sales rose 7.5% in the fourth quarter ended Dec. 31, including 13.4% on a two-year basis, a figure that kept pace with previous periods’ two-year sales figures. The company said that its sales last year were driven by dramatic increases in digital orders and sales of its new chicken sandwich and the McRib.

The company also cited its MyMcDonald’s Rewards loyalty program for driving sales last quarter. The program has 30 million members in just six months and 21 million active users.

Prices also played a role. McDonald’s said sales rose last quarter due to average check growth, “driven by strategic menu price increases.” The company’s franchisees have been raising prices aggressively to match rising costs for labor and food. McDonald’s executives said prices were up more than 6% last year.

McDonald’s U.S. same-store sales

Source: Company reports

The company’s U.S. performance helped push the company’s global systemwide sales to $112 billion, a record for the company. McDonald’s now has 40,000 restaurants globally, most of which are owned and operated by franchisees.

Digital sales have become huge for the company. Digital systemwide sales exceeded $18 billion last year, the company said. More than a quarter of sales in the chain’s six biggest global markets, including the U.S., now come through digital channels, including mobile order and delivery.

Revenues at the company increased 13% to $6 billion in the fourth quarter. Net income rose 19% to $1.6 billion, or $2.18 per share. Yet the earnings-per-share number fell below Wall Street expectations for profits, according to data from the financial services site Sentieo.

“While 2021 was a year of continued challenges around the world, the McDonald’s system came together with unparalleled dedication and delivered truly exceptional performance,” CEO Chris Kempczinski said in a statement.

Executives did indicate that reduced operating hours at U.S. restaurants has eased considerably. Kempczinski told investors on Thursday that only 1% of restaurants are not operating their full hours—down from 10% in mid-December. Yet only about 80% of the chain’s dining rooms are currently open, a number the company expects to increase.  

Opening the dining rooms will be important, however, to ease the burden of the drive thru. Executives said service times through those lanes were hurt last year because of labor shortages.  

McDonald’s did indicate that, globally, COVID-19 “continued to result in varying levels of government restrictions on restaurant operating hours, limited dine-in capacity and, in some cases, dining room closures.” The company said it “will continue to adapt and enhance its approach in order to protect the safety and well-being of its customers and people.”

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