McDonald's says its value meals, namely its beloved Snack Wraps, have helped boost sales as a slew of fast food chains struggle to retain customers amidst concerns about the broader economy.
The burger joint reported Wednesday that its U.S. same-store sales increased 2.4 percent from July to September, a faster growth than Wall Street analysts expected.
Global same-store sales showed a similar story, growing 3.6 percent during that same time period.
McDonald’s new Extra Value Menu, which launched in the U.S. in September to attract customers deterred by rising fast-food prices, has played a key role in drawing back customers.
The return of Snack Wraps, a fan-favorite order that vanished from the fast food joint’s menu nine years ago, has also helped to boost the chain’s sales in recent months. The wraps cost just $2.99 each.
There was a 15 percent surge in U.S. store traffic the day the Snack Wraps were rereleased, according to Placer.ai data.
McDonald’s has also taken advantage of various promotions to draw in customers. While the new Extra Value Menu boasted an $8 Big Mac meal or a $5 Sausage McMuffin meal for a limited time, most of these value meals didn’t do much to increase traffic, according to Placier.ai.
What attracted customers more was various special promotions, including a 50-cent double cheeseburger on September 18 to celebrate National Cheeseburger Day, according to the data.
McDonald’s third-quarter revenue rose 3 percent to $7.08 billion, which was on par with analysts’ predictions, the company announced Wednesday.
The chain’s net income rose 1 per cent to $2.28 billion. Adjusted for one-time items, including $39 million in restructuring charges, McDonald’s earned $3.22 per share, just short of the $3.33 that analysts forecasted.
Meanwhile, McDonald’s shares were flat in premarket trading on Wednesday. The company maintained its fiscal year outlook for operating margins, capital expenditures and unit growth.
With the introduction of its Extra Value Menu, McDonald’s seems to be trying to soothe the economic worries of many Americans who have started to slow on visiting restaurants.
The company also brought back its popular Monopoly game on October 6, allowing players to use the chain’s app and opt in to its rewards program to potentially earn prizes. Fans were able to play after ordering qualifying menu items through the start of November.
Unlike McDonald’s, several other pricer chains have reported weaker-than-expected results for their third-quarter.
Fast casual chains including Chipotle and Cava, where a meal can cost upwards of $15, reported less customer traffic over the past three months ending on September 30, which Chipotle CEO Scott Boatwright attributed to more people eating at home instead of going out.
“They’re just eating with us less frequently, and they’re eating at home more often,” Chipotle’s CEO Scott Boatwright told the Wall Street Journal.
Many young Americans are eating out less to save money. A recent survey by accounting firm PricewaterhouseCoopers found that, out of 1,000 Gen Z and teenage respondents, more than half said they planned to spend less at restaurants over the next six months.
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