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McDonald’s sales surge as COVID pandemic lifts

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McDonald’s sales are soaring above even pre-pandemic levels as the economy roars back to life.

The largest restaurant company in the world said demand surged for its Big Macs, fries and Chicken McNuggets in the first quarter — thanks to coronavirus stimulus checks and the company’s vast network of drive-thrus. New menu items, including a crispy chicken sandwich rolled out earlier this year, and upgraded delivery service also helped the fast food giant beat Wall Street’s expectations, the company said.

McDonald’s US President Joe Erlinger said the latest round of federal stimulus checks likely boosted first quarter sales. But he added, “The positivity we saw in the first quarter was way beyond just the stimulus checks.”

Global same store sales in the first three months of the year rose by 7.5 percent, surpassing 2019 levels, the company said on Thursday. Sales were fueled by a whopping 13.6 percent increase in the US, the company said.

Revenue rose 9 percent to $5.12 billion, beating expectations of $5.03 billion. Global same-store sales climbed 7.5 percent in the quarter, surpassing 2019 levels. Net income grew to $1.5 billon from $1.1 billion a year ago.

McDonald’s drive-thru window business, which expanded as a result of the pandemic, contributed to the rise. The company said some 90 percent of its US sales in the quarter were made through drive-thru windows, up from 70 percent before the pandemic.

Drive-thru customers helped push the surge in sales at McDonald's.
Drive-thru customers helped push the surge in sales at McDonald’s.
Sipa USA via AP

Improvements the company made to its food delivery as a result of the pandemic also helped as delivery orders, now available at 75 percent of its stores, tend to be larger than in-store orders, the company said.

The company’s new menu items, which have included popular partnerships with hip-hop star Travis Scott and Latin pop star, J Balvin, helped drive US sales, experts said. 

“We’re two months past the initial launch of late February, and we still feel really good about the volume and unit movement that we’re seeing,” the company’s US president Joe Erlinger said about the new chicken sandwich according to CNBC.

The company said it is considering raising wages at its company-owned stores to address a labor shortage that has plagued the restaurant industry even as the economy recovers.

Travis Scott surprises crew and customers at McDonald's for the launch of the Travis Scott Meal in September 2020.
Travis Scott surprises customers at McDonald’s for the launch of the Travis Scott Meal in September 2020.
Getty Images for McDonald’s

McDonald’s also raised its systemwide sales outlook for 2021 from growth in the low double digits to the mid-teens.

McDonald’s shares were up by less than 1 percent on Thursday morning.

“Our first quarter 2021 global comparable sales and revenues surpassed first quarter 2019 levels, even as resurgences and operating restrictions persist in many parts of the world,” chief executive, Chris Kempczinski said in a statement.

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