McDonald’s hails ‘strong’ innovation pipeline for UK sales boost

McDonald’s has hailed its expanded beverages lineup and ongoing breakfast focus for lifting sales and market share in the UK in the quarter, but warned growing competition will stunt global growth in the coming months.

The fast-food chain hailed the success of its McCafe range for driving growth in the UK.

The restaurant has just revealed like-for-like sales for its European restaurants rose by just 0.2 per cent year-on-year for the three months to 30 September as markets such as the UK, France and Russia propped up earnings across the region.

It singled out the UK’s performance during this time, citing the “successful” launches of of McCafe iced smoothies and frappes as a “significant step” in its efforts to become a beverage destination in the UK. The business unified its premium drinks and sweet snacks under its McCafe sub-brand nationwide last week in a bid to spearhead the strategy.

Don Thompson, president and chief executive of McDonald’s, said the UK’s growth was “pretty much” offset by other markets. Globally, the fast-food chain posted a 0.9 per cent year-on-year rise in sales at restaurants open at least 12 months for the quarter. It is the company’s fourth-consecutive quarter of results lower than analysts’ predictions.

Thompson said it continued to operate in a “challenging environment”, but insisted there would be no “dramatic restructuring” to drive growth. It is banking on technology, spurred by upcoming work from its recently appointed digital marketing chief, alongside more brand building around food provenance to lead the turnaround in sales.

Thompson adds: “Technology is going to be a big part of our future, particularly digital engagement with consumers. And so you’ll hear us and see us talk much more about digital engagement with consumers. The other thing that you’ll see change a bit is we are being much stronger relative to communicating about our brand, communicating about our food. Customers want to hear more about transparency. They want to hear about provenance and where the food is from.”

The food provenance push has already been rolled out to some European markets earlier this year to allay consumer fears stemming from the Horsemeat scandal.

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