Financing

Kiosks and higher prices drive McDonald’s sales

U.S. same-store sales rose 4.8% as customers made larger orders, but traffic remains challenged.
Photograph courtesy of McDonald's Corp.

McDonald’s U.S. same-store sales rose 4.8% in the third quarter, the company said Tuesday, as it continued to get customers to make larger orders and pay higher prices.

But the company continues to lose transactions, as its yearlong trend of higher sales and weak traffic continued in the quarter ended Sept. 30. Company officials said that there “hasn’t been a change” to traffic trends in the period.

Worldwide, same-store sales rose 5.9% in the third quarter as McDonald’s continued to demonstrate strength in all of its major markets.

Still, the U.S. remains the company’s largest market, where it operates nearly 14,000 of the chain’s 38,000 total restaurants.

Many of McDonald’s efforts domestically have driven average check by getting consumers to make higher-priced orders, even if they haven’t necessarily convinced customers to come in more often.

The company has been remodeling restaurants with kiosks in its “Experience of the Future” design. Customers tend to make larger orders on kiosks than they do at the front counter.

Similarly, delivery—now in about 10,000 of McDonald’s U.S. restaurants through a combination of Uber Eats and DoorDash—also tends to get customers to make larger orders. And McDonald’s has been adding drive-thru technology from recently acquired Dynamic Yield.

That technology gives its drive-thru screens Amazon-like capabilities, which also tends to drive order count.

The company also cited menu price increases for the higher same-store sales, as operators raised prices to pay for higher labor and other costs. McDonald’s said that its national and local deal offerings also generated sales in the quarter.

Still, McDonald’s has generally led its quick-service burger peers in recent quarters as its initiatives have taken hold.

Revenues in the quarter increased 1% to $5.4 billion. Earnings per share was flat at $2.11.

McDonald’s has been working to bolster traffic for much of the year, focusing on improving its drive-thru speed with contests and new technology. The company has also been working on its morning business, where sales and traffic have been weakest amid mounting competition.  

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