McDonald's Same Store Sales Increase

McDonald's posted an increase in same store sales for August. Check out the Wall Street Journal Article for more details below. For more information on franchising your business or franchise consultants go to www.francorp.com.

McDonald's Olympic Offerings
Help Boost Same-Store Sales
By SHARA TIBKEN
September 9, 2008 10:26 a.m.
Wall Street Journal
http://online.wsj.com/article/SB122096447139714607.html?mod=djkeyword

McDonald's Corp. reported an 8.5% increase in August global same-store sales, with a 4.5% gain domestically, boosted by beverages, the popular breakfast menu and the Olympic-themed Southern Style Chicken Sandwich.

European same-store sales jumped 12% due to menu variety and strong performance in the U.K., France and Germany. The company's Asia-Pacific, Middle East and Africa region saw 10% growth, driven by extended hours and Olympic-related marketing.

Systemwide sales increased 14% world-wide, or 10% in constant currency.

In March, McDonald's reported same-store sales in the U.S. fell for the first time in five years, but the company has posted solid increases since then. The overall restaurant sector in the U.S. has been hurt by high gasoline and food prices, as well as by the slumping housing market and credit crisis. August sales slowed across the fast-food industry, but UBS predicted on Monday that McDonald's could outperform its peers on the back of its Olympics advertising campaign and a successful "Star Wars" Happy Meal.

Soaring commodity costs have forced some McDonald's franchises to re-evaluate pricing, including for the popular Dollar Menu offerings. McDonald's has been testing modifications to its popular $1 double cheeseburger, and higher prices for the sandwich, as it prepares to change its Dollar Menu by next year. Some restaurants are selling it with one slice of cheese instead of two and billing it as a "double hamburger with cheese." Others are offering a double hamburger without cheese.

But McDonald's has been benefiting from new menu items, expanded hours and the tendency of cash-strapped consumers to "trade down" from more pricey eating-out options in the U.S. Overseas, it is benefiting from expansion and internal growth in markets like Australia, China and Japan while getting the currency benefits of the sagging U.S. dollar.

Write to Shara Tibken at shara.tibken@dowjones.com