As the economy tightens and people begin to spend less and less, is fast food becoming the next food option? If so does this make McDonald’s recession proof? Are those who went to Ruby Tuesday’s or other middle-of-the- road sit down restaurants finding a safe cost effective haven in fast food? So far it seems that way, this from Market Watch:
“McDonald’s Corporation MCD 65.37, +3.51, +5.7%) announced today that global comparable sales increased 8.0% in July. Systemwide sales for McDonald’s worldwide restaurants rose 15.9% in July, or 9.5% in constant currencies.
In the U.S., our strategic focus on breakfast, chicken and beverages, while advertising the classic Big Mac sandwich, fueled July’s 6.7% comparable sales increase.”
Sales are up and they are claiming it is due to strategy. Is it? I would think that this is a possible explanation but the Big Mac isn’t new. They do have a few new chicken items but I have a feeling the economy is helping them some. Obviously, this couldn’t be the case alone. People who went to McDonald’s before may substitute more home cooking. Even though this probably only is for large families because the economies of scale for cooking doesn’t really kick in until you have 4 members or more.
The rest of the article can be found here.