Although McDonald’s continues to place greater emphasis on digital sales of late, the brand isn't writing off dining rooms. It's reopened nearly 80 percent of its lobbies in the U.S., with roughly 3,000 remaining closed in high-risk COVID areas. At restaurants that feature an open cafe, front counter and kiosk sales are still below pre-pandemic levels, but modest increases in these channels helped relieve pressure in the drive-thru.
Kempczinski said McDonald's started thinking about potential scenarios of how to reuse space if dine-in never snaps back to pre-COVID levels. However, he emphasized talks are preliminary and McDonald’s doesn’t want to do anything until it gets a better read on where things land.
Ozan also pointed out that dining rooms in the U.S. and Europe are not the same conversation.
“Certainly in Europe dine-in is a bigger percentage of our sales and is an important part of that business, and we have seen dine-in return,” the CFO said. “I mean, kiosk usage is getting back to almost where it was pre-pandemic, and so the family business is very important in Europe. To [Kempczinski’s] point, we got to be careful about what we do, because it isn't the same around the world as far as dine-in business and how customers view that side of the business.”
McDonald’s said its Famous Orders platform and Crispy Chicken Sandwich, which is exceeding expectations, also contributed to strong comps growth. Additionally, the brand is seeing positive same-store sales across all dayparts on a two-year basis, with sustained double-digit comp increases at dinner and breakfast.
Kempczinski said staffing woes have caused limited operating hours and slips in speed of service, but he also noted that franchisees are still hauling in record-high restaurant cash flow.
“Our U.S. franchisees have never been better positioned to weather the labor and inflation pressures, while still investing in growth,” the CEO said.
Outside of the U.S., International Operated Markets grew same-store sales 13.9 percent year-over-year, and 8.9 percent on a two-year basis, driven by strong results in the U.K., Canada, France, and Germany. International Developmental Licensed Markets lifted 12.7 percent in Q3, or a rise of 4.9 percent on a two-year stack. That group was led by growth in Japan and Latin America, and partially offset by negative comps in China due to COVID resurgences.