Thomas Lyons 
Fast food giant McDonald’s has announced that it has exceeded expectations in terms of sales for the first quarter of 2021. Despite higher prices, the company reported a 12.6% increase in global same-store sales in comparison to the same period last year. This figure is significantly higher than the 8.7% increase predicted by Wall Street analysts. This success can be attributed to a number of factors, including good weather in January and the easing of Covid restrictions in China. Additionally, the company’s marketing campaigns, such as its Valentine’s Day meal promotion in the US with rappers Offset and Cardi B, have helped to boost sales.
McDonald’s CEO, Chris Kempczinski, acknowledged that the company is beginning to see resistance to price increases in many markets. Customers are becoming more selective in their orders, with some choosing not to add fries or opting for pick-up instead of delivery to avoid extra costs. Kempczinski emphasized the need for the company to remain disciplined on pricing, stating that “the customer certainly is dealing with some of the stress and pressures on that.”
However, McDonald’s must also contend with higher prices for food, paper, and workers. Chief Financial Officer, Ian Borden, reported that inflation is on a downward trend in the US, but remains elevated. In Europe, the company expects double-digit percentage inflation to continue for the rest of the year. Borden described Europe as “working through the eye of the storm.”
Despite these challenges, McDonald’s is hoping to maintain its success by improving its menu. The company recently announced that US eateries will switch to softer buns and meltier cheese and change their grill settings to make their burgers juicier. These changes have already been implemented in 15 other markets, including Australia and Canada, where they have improved customer taste scores.
McDonald’s reported revenue of nearly $5.9 billion for the first quarter, a 4% increase from the same period last year. This figure exceeded analyst projections of $5.6 billion. However, the company also announced that it had laid off several hundred corporate workers earlier this month in an effort to speed up innovation and decision-making. McDonald’s booked a restructuring charge of $180 million to account for severance payments and the closure of some regional offices. Without this one-time charge, McDonald’s earned $2.63 per share, which is 30 cents better than expected.
Despite the strong sales figures, McDonald’s shares fell by less than 1% on Tuesday. The company’s success in the first quarter of 2021 demonstrates its ability to adapt to changing circumstances and maintain its position as a leader in the fast food industry.
