McDonald’s China rebounds

After a long running series of quarterly sales declines, McDonald’s says it global sales rose four per cent in the last three months.

And McDonald’s China has played a key role in the recovery.

President and CEO Steve Easterbrook said the company was encouraged by its operating performance for the quarter, with positive comparable sales across all segments, including the US, “as well as sales recovery in China following the prior year supplier issue”.

“In the High Growth Markets segment, third quarter comparable sales increased 8.9 per cent, reflecting very strong comparable sales performance in China and positive performance in most other markets. Operating income increased 39 per cent (68 per cent in constant currencies). Emphasis on value and breakfast during the quarter contributed to China’s sales recovery.”

The company suffered a major setback in China a year ago after some of its stores were found using expired products.

Elsewhere in the world, McDonald’s has also seen recovery in the UK, Australia and German markets.

Easterbrook said the latest figures underline the “fundamental strength of the McDonald’s System”, perhaps a reference to recent media commentary questioning the concept and estimating as many as 30 per cent of McDonald’s franchisees in the US are technically insolvent.

Unfortunately, the company did not releases specific breakdowns on sales by country market within its ‘High Growth Markets’ business unit which comprises countries like China and Vietnam.

In its home market, initiatives like extending the breakfast menu to all day and new product lines were helping lure customers back in store.

In tandem with its results announcement, the fast food company made a commitment to phasing out chicken fed antibiotics.