NEW YORK CITY, AP – McDonald’s ended 2021 on a high note with US customers spending more and fewer restaurant closures in Europe from coronavirus restrictions.
But higher costs for food and labour weighed on profits and the company said it expects that pressure to continue this year.
Global same-store sales – or sales at restaurants open at least a year – rose 12.3 per cent in the quarter, the Chicago burger giant said on Thursday.
That is better than the 10.5 per cent increase that Wall Street was expecting.
In the US, same-store sales rose 7.5 per cent as limited-time products like the McRib and new options like a revamped chicken sandwich drew customers despite higher menu prices.
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McDonald’s said US prices climbed just over 6 per cent in 2021.
A rapidly growing US loyalty program also help draw in customers.
My McDonald’s Rewards, which launched in the US in July, now has 21 million active members, the company said.
Revenue rose 13 per cent to $US6.01 billion ($A8.52 billion), which was just shy of Wall Street expectations, with sales crimped by coronavirus restrictions in Australia and China.
McDonald’s was stung by rising prices and higher labour costs.
US costs for food and paper products rose 4 per cent in 2021 and 3 per cent internationally in 2021, Chief Financial Officer Kevin Ozan said.
Those costs are expected to double globally in 2022, with inflation more pronounced in the first half of the year, he said.
“We certainly don’t expect it to wipe away what we gained either in 2021 or prior to that,” Ozan said on Thursday in a conference call with investors.
“But it certainly will pressure both margins and cash flow.”
McDonald’s raised hourly pay for 36,000 US employees at its company-owned restaurants last year.
Franchisees own 93 per cent of McDonald’s 40,000 restaurants worldwide but several thousand stores are owned by McDonald’s.