Surprise Global Sales Surge: McDonald's Rides Middle East Demand Wave

McDonald's reported a surprise increase in global comparable sales in Q4, driven by strong performance in the Middle East, Japan, and China. Despite U.S. setbacks due to an E.coli outbreak, shares rose 3%. The success was partly due to offering value meals amid shifting consumer preferences and geopolitical tensions.

McDonald's saw its global comparable sales unexpectedly rise in the fourth quarter, fueled by strong demand in the Middle East, Japan, and China. This sales boost came despite a significant decline in U.S. sales following an E.coli outbreak and cautious consumer spending.

Amid easing informal boycotts over geopolitical tensions in the Middle East, the region provided a crucial boost, compensating for McDonald's biggest U.S. sales drop of 1.4% since the COVID-19 pandemic. The rise in the Middle East mirrored positive sales at rival Yum Brands' KFC.

Value-priced meals helped drive traffic, especially from lower-income consumers, though profitability remains a concern. McDonald's extended its initiatives like the $5 meal deal and introduced the Chicken Big Mac to sustain momentum. A 0.4% rise in global same-store sales beat decline expectations, supported by local partnerships in key markets.

(With inputs from agencies.)