McDonald’s (MCD) customers in the United States love fast food chains, even at higher prices.
Golden Arch US sales increased 6.1% in the third quarter. That’s as more customers returned to the restaurant, delivery sales hit a record quarter, and drive-thru sales returned to his pre-COVID levels. This positive momentum came despite menu prices rising 10% year-over-year.
“McDonald’s in the US had good traffic. You don’t see many restaurants in the US today with good traffic,” BTIG Managing Director and Restaurant Analyst Peter Saleh told Yahoo Finance Live (video above). ). “Consumers aren’t necessarily pushing back higher prices, which are up about 10% year-on-year despite all the inflation we’re seeing.”
According to Placer.ai’s Bracha Arnold, McDonald’s foot traffic increased 6.2% year-over-year in September alone. This surpassed visitor numbers across the broader quick service restaurant (QSR) category, where he increased only 0.8% over the same period.
In an earnings call with analysts on Thursday, McDonald’s executives stressed that the company was still able to “push its pricing forward” despite challenges in the current macroeconomic environment, adding that it “compared to competitors.” It proved the strength of brand proposals.
CEO Chris Kempczinski also said the restaurant industry continues to benefit from rising prices for meals at home.
According to the U.S. Bureau of Labor Statistics, grocery prices rose 13% in September, while away-from-home grocery prices rose 8.5%.
Saleh, who has a buy valuation on McDonald’s stock and a $280 price target, said consumers are likely to look for value when it comes to food purchases, as a recession may be underway. did.
“In short, consumers still have to eat, so either they eat at grocery stores or they eat at restaurants,” Saleh said. “Grocery store prices are higher than restaurant prices. At this point, restaurants are actually offering a little more value than they used to.”
But Sale cautioned that when key economic drivers go bad, not all is well for the food chain.
“When you go into a recession, unemployment starts and the unemployment rate goes up.
Brooke DiPalma is a reporter at Yahoo Finance. Follow her @@ on Twitter.brooke di palma Or email [email protected]
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