This image provided by McDonald’s Corporation shows a Quarter Pounder burger. McDonald's says it will swap frozen beef patties for fresh ones in its Quarter Pounder burgers by sometime in 2018 at most of its US locations. Employees will cook up the never-frozen beef on a grill when ordered. Courtesy of McDonald’s Corporation via AP
This image provided by McDonald’s Corporation shows a Quarter Pounder burger. McDonald's says it will swap frozen beef patties for fresh ones in its Quarter Pounder burgers by sometime in 2018 at most of its US locations. Employees will cook up the never-frozen beef on a grill when ordered. Courtesy of McDonald’s Corporation via AP

Big restaurant chains could see sales rebound this week

By Reuters Time of article published Jul 27, 2020

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This image provided by McDonald’s Corporation shows a Quarter Pounder burger. McDonald's says it will swap frozen beef patties for fresh ones in its Quarter Pounder burgers by sometime in 2018 at most of its US locations. Employees will cook up the never-frozen beef on a grill when ordered. Courtesy of McDonald’s Corporation via AP

By Hilary Russ

INTERNATIONAL - McDonald’s, Starbucks, Yum Brands and other big restaurant chains could show improving sales, based on early results from rivals such as Chipotle Mexican Grill that improved despite dining rooms shuttered for months.

Large brands have been able to shift quickly to simplified menus, mobile ordering, pick-up, drive-thru and delivery to get food to customers quickly and with less face-to-face contact.

Chipotle Mexican Grill sales have risen 6.4 percent so far in July, the company reported on Wednesday.

After surveying McDonald’s franchisees, Kalinowski Equity Research last week raised its projection for comparable McDonald’s sales for the current quarter to 2.4 percent from flat.

Restaurants and bar receipts started 2020 at a record $65.55 billion in January, plunged to $30bn in April – the lowest since December 2003 – and came back to $47.425bn in June, according to the Commerce Department’s monthly retail sales report.

Soaring coronavirus cases in Florida and Texas - where Bloomin’ Brands has 286 company-owned locations - have not dampened sales there despite restrictions on how many people can dine in at once, the company said on Friday.

Bloomin Chief Executive Officer David Deno told Reuters that “people want to go out... and you’re seeing that in our trends.”

Dunkin’ Brands Group, Cheesecake Factory and Shake Shack also report financial results this week.

To be sure, with coronavirus cases hitting record highs, better sales are far from confirmed.

Total transactions at major US restaurant chains fell by 14 percent in the week ended July 12 versus a year ago – compared to a smaller 11 percent drop the prior week, according to data analytics firm The NPD Group.

Separately, US dining food and supply orders in the US had been recovering but dropped 15.4 percent during the week ending July 11 from the week before, as tracked by Buyers Edge Platform, a restaurant group purchasing organization and supply chain company.

Changes to enhanced unemployment insurance could also dampen consumer spending at some restaurants. Congress expected to consider legislation next week that may extend the benefits.

Nonetheless, Del Taco Restaurants sales improved during the first five weeks of the current quarter, it reported on Thursday.

“Absent a major setback from the pandemic, we believe that the worst of it may be behind us,” chief executive officer John Cappasola said.

REUTERS

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