An employee wearing protective gloves at restaurants keeps orders at fast-food giant McDonald’s prototype locations that follow a 6-foot social isolation measure.
Piroschka van de Wouw | Reuters
McDonald’s notes that some trends in consumer behavior are changing due to easier closures, but the fast-food giant believes larger delivery orders and other purchasing patterns will persist long after the coronavirus pandemic.
The company announced its second-quarter results on Tuesday. Shares fell 2.1% during the morning trading, as she said earnings fell 30% in the three months ended June 30th.
McDonald’s executives said its average order was higher, but the total number of customers declined during the quarter. As traffic improves, the size of orders decreases.
“Part of it was mixed, so you saw the delivery become a much brighter part of the mix in the second quarter,” CEO Chris Kempczinski told analysts.
In Australia, delivery accounted for almost 10% of sales, doubling the previous contribution to the sales package. Delivery in the U.S. has not yet reached such heights, although it has continued to grow over the quarter.
“When it comes to enduring behavior, I think it’s the use of kiosks, the use of mobile devices, the use of delivery, the use of drive-thru, of course, one of the things is that customers are looking for a more contactless type of experience,” Kempczinski said. “They want more digital experiences to be able to surf on their own.”
In addition to higher delivery and digital orders, consumers also enjoyed a driving system than usual. In the U.S., nearly 90% of sales came from its lanes. CFO Kevin Ozan said markets with a higher percentage of lanes are recovering faster.
However, places near supermarkets, city centers or travel destinations are under greater pressure as tourism, indoor shopping and work from office buildings do not satisfy consumers. Weekend sales fell short of pre-pandemic levels, but weekly business recovered faster.
US breakfast remains the hardest time of the day. Consumers cook early in the morning by opting for a grain and frozen waffle trip to McDonald’s drive-thru. However, executives said the chain has gained market share over the quarter, which could mean some new customers will continue to buy their eggs from McMuffins even after renewing their previous arrangements.
The economy also plays a role in influencing consumer behavior, and McDonald’s seeks to use value transactions and affordability to outperform competition.
“When you go into a potentially more recessive environment in many key markets, it’s very important to have good affordability and make sure it’s a key component of your marketing complex,” Kempczinski said.
Kempczinski said the end of higher unemployment benefits is likely to have a negative impact on McDonald’s business. Senate Republicans have proposed cutting additional aid from $ 600 a week to $ 200 a week. Kempczinski said it could not predict the impact of the plan on sales.