Fast food gets its fix as Domino’s and McDonald’s beat on sales

Fast food chains McDonald’s and Domino’s Pizza have today both reported growth in second-quarter sales, beating analysts’ predictions.

McDonald’s recorded a 3% fall in revenue but comparable sales increased 6.6% on a global basis, reflecting positive guest counts in all segments. Revenue stood at $6.05 billion, while net income was 28% higher at $1.4 billion.

It said the US market ‘continues to build momentum’ amid efforts to make its food more convenient, offer better value, and innovate in its menus to increase both the number of customers in its stores and the frequency of visits.

For Domino’s Pizza, net income increased 33.5% on the same period last year to reach $65.7 million, driven by international same-store sales growth of 2.6% and US same-store sales growth of 9.5%. For the first half of the year, the company has made $128.2 million – 35% higher than the first two quarters of 2016.

The results reflect well on the state of the fast-food industry, despite increasing consumer health awareness and regulatory pressure around both sugar and fats.

McDonald’s chief executive officer Steve Easterbrook said: “Whilst we’re encouraged by our results from the first half of 2017, we’re not complacent. Today, we’re acting like a leadership brand, taking on new challenges and opportunities and moving with a greater sense of purpose and urgency. We’re building on our momentum, leveraging our size and scale and executing with greater precision against our priorities to retain, regain and convert customers by giving them even more reasons to visit and enjoy McDonald’s.

‘Strongest comparable sales in five years’

“We’re building a better McDonald’s and more customers are noticing. Our relentless commitment to running great restaurants and keeping the customer at the centre of everything we do is generating broad-based strength and momentum across our entire business.”

“For the quarter, we delivered our strongest global comparable sales and guest count results in more than five years,” Easterbrook said. We’re now introducing our Velocity Growth Plan accelerators in more restaurants around the world, bringing meaningful benefits to more customers through digital, delivery and our Experience of the Future.”

The company’s plans for future growth are pinned on home delivery, digital ordering in stores and mobile payment – where it faces competition from close rival Burger King.

Digital ordering is at the heart of both companies’ growth plans – as well as that of Burger King.

That move is mirrored by Domino’s; for the past few years, it has experimented with emerging payment platforms such as smart watches, smart TVs, text, Twitter, and Facebook Messenger.

In April 2016, it launched a ‘zero-click app’ that allows consumers to automatically order a saved pizza preference by loading up the application and waiting for the ten-second timer to expire. And in December, it added the option for consumers to order through Google Home, the technology giant’s voice-activated assistant.

For Domino’s, which opened more than 200 new stores last quarter, it was a period defined by strong same-store sales and improved footprint.

The company operates or franchises more than 14,200 stores in over 85 different countries.

“It was another outstanding quarter for our domestic business, as brand momentum, strong execution and emphasis on getting better each day continued to drive what we do,” said J Patrick Doyle, Domino’s president and chief executive officer. “While international same-store sales growth was slightly under our expectations, we remain very confident in our continued ability to generate best-in-class growth, and are encouraged by the strong store growth we are seeing from our international franchisees.”

“As a work-in-progress brand, we will always remain focused on areas we can improve – but I am extremely pleased that our steady strategy, solid fundamentals and strong alignment with franchisees and operators had us well positioned to sustain success and win.”