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Does McDonald's Have A Traffic Problem?

Jayson Derrick

McDonald's Corp (NYSE: MCD) posted 5.1% U.S. same-store sales growth in its fourth-quarter earnings report, but this doesn't tell the full story.

Breaking Down McDonald's Traffic 

McDonald's same-store sales growth in the final months of 2019 was driven by new initiatives like delivery, kiosks, and promotional items, according to Restaurant Business

Yet total foot traffic for the full-year 2019 was down 1.9%. In fact, same-store traffic in the U.S. market has fallen in six of the past seven years.

According to a Restaurant Business estimate, McDonald's cumulative customer count has declined by more than 13% since 2012 — despite a lower store count. McDonald's store count peaked at 14,350 in 2014 and stood at 13,846 at the end of 2019.

Why It's Important For McDonald's

McDonald's was able to increase same-store sales amid falling traffic through price increases, according to Restaurant Business.

Specifically, the average check size was 7% higher in the most reported quarter from price increases and consumers ordering more items per transaction.

McDonald's is hoping this trend continues and the company is investing heavily in new technologies, according to Nation's Restaurant News

The fast food chain offered some commentary during its post-earnings conference call Wednesday.

The artificial intelligence-powered drive-through menu board is now featured at more than 11,000 of the total 13,900 restaurants.

McDonald's CEO Says M&A Possible

McDonald's CEO Chris Kempczinski also said on the conference call the company will be open to further acquisitions to support its digital business.

"When we can partner with people and do it under our traditional model, that's always our preference. But if there are times that we need to do an acquisition, we're certainly not going to take that off the table," he said.

The stock was down 1.02% at $213.97 at the close Friday. 

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