The coronavirus pandemic is splitting the restaurant industry in two. Big, well capitalized chains like

Chipotle Mexican Grill Inc.

and

Domino’s Pizza Inc.

are gaining customers and adding stores while tens of thousands of local eateries go bust.

Larger operators generally have the advantages of more capital, more leverage on lease terms, more physical space, more geographic flexibility and prior expertise with drive-throughs, carryout and delivery. A similarly uneven recovery is unfolding across the business world as big firms have tended to fare far better during the pandemic than small rivals, thinning the ranks of entrepreneurs who could eventually become major U.S. employers. In the retail world, bigger chains like

Walmart Inc.

and

Target Corp.

are posting strong sales while many small shops struggle to stay open.

The divide between large and small restaurants surfaced in the summer. Chipotle more than tripled its online business sales in the second quarter while Domino’s,

Papa John’s International Inc.

and

Wingstop Inc.

all reported double-digit same-store sales increases in the third quarter compared with the year-earlier period. McDonald’s also said U.S. same-store sales rose 4.6% in the third quarter. That included a rise in the low double digits during September, its best monthly performance in nearly a decade. It credited faster drive-throughs and promotions.

Off Menu

People are spending less than during the last recession at restaurants, particularly smaller independent ones, straining the finances of many businesses.

U.S. restaurant consumer spending, change from previous year

U.S. food service sales,

change from previous year

Small U.S. businesses’ default rate on loans and leases

Accommodations

and food services

Small U.S. businesses’ default rate on loans and leases

U.S. restaurant consumer spending, change from previous year

U.S. food service sales, change from previous year

Accommodations

and food services

U.S. restaurant consumer spending, change from previous year

McDonald’s  (MCD) – Get Report, the world’s largest fast-food restaurant chain, reported that its U.S. comparable-store sales rose 4.6% in the third quarter, while its global comparable sales slid 2.2%.

The company also raised its dividend payable in December by 3% to $1.29 a share from $1.25 in September.

In the U.S, sales benefited from “strong average check growth from larger group orders as well as strong performance at the dinner daypart,” McDonald’s said in a statement.

“The company’s strategic marketing investments and resulting promotional activity drove low double-digit comparable sales for the month of September, including positive comparable sales across all dayparts. Comparable guest counts remained negative for the quarter,” the company added.

McDonald’s also said it benefited from a meal promotion with musician Travis Scott and faster service at its drive-throughs.

In international developmental licensed markets, McDonald’s suffered “negative comparable sales in Latin America and China, partly offset by strong positive comparable sales in Japan.”

In international operated markets, “comparable sales varied across markets with negative comparable sales in France, Spain, Germany and the U.K., partly offset by positive comparable sales in Australia,” McDonald’s said.

“Comparable sales results improved throughout the quarter, with consumer sentiment and government regulations impacting the pace of recovery from Covid-19. Limited operations also remained in place for some markets.”

In the U.S., fast food restaurants have benefited at the expense of sit-down eateries during the coronavirus pandemic, as consumers shy away from spending much time in public places.

McDonald’s shares recently traded at $228.01, up 0.71%. McDonald’s has gained 15% year to date through Wednesday.

Source Article

  • McDonald’s global same-store sales fell 2.2% during the third quarter.
  • The fast-food chain said its U.S. same-store sales turned positive. 
  • McDonald’s also said it is increasing its quarterly cash dividend by 3% to $1.29 per share.



graphical user interface, application: A worker cleans the floor in a McDonald's restaurant in the Chicago Loop on March 19, 2020 in Chicago, Illinois.


© Provided by CNBC
A worker cleans the floor in a McDonald’s restaurant in the Chicago Loop on March 19, 2020 in Chicago, Illinois.

McDonald’s said Thursday its U.S. same-store sales in the third quarter rose nearly 5% as customers ate more Big Macs and McNuggets for dinner.

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Fast-food companies like McDonald’s have been recovering from the coronavirus pandemic faster than the broader restaurant industry, thanks to their convenient drive-thrus and cheap prices. Shares of McDonald’s, which has a market value of $177 billion, have risen more than 16% this year.

The stock rose 1% in premarket trading on the announcement.

The chain’s U.S. comeback has been helped by its promotions and marketing. In September, it offered a deal on rapper Travis Scott’s favorite meal, causing the chain to restrict certain ingredients due to its popularity. Scott’s $6 meal included a quarter pounder with cheese and his favorite toppings, an order of french fries with barbeque sauce and a Sprite. With the help of that deal, September had the highest monthly same-store sales in nearly a decade, with growth across all meal times.

This month, it’s following up the promotion with a similar deal featuring reggaeton singer J. Balvin’s order, which includes a Big Mac sandwich, medium french fries with ketchup and an Oreo McFlurry. 

In the U.S., its same-store sales growth was boosted by more orders being made as part of a group, which drives up the value of each check. It’s also attracting more dinner customers, but overall traffic remains negative.

Outside of its home market, McDonald’s is bouncing back