U.S. News

Coffee, McNuggets fuel McDonald's April increases

ASHLEY M. HEHER|AP Retail Writer

Icy coffee drinks and chicken nuggets lured McDonald's Corp. customers to spend more in April, boosting a key performance measure, the fast-food chain said Monday.

Around the globe, sales in locations open at least a year rose 4.9 percent last month. In the U.S., the figure climbed 3.8 percent.

That's slightly less than the gains made in March, when the measure rose 4.2 percent, but was still the second-best posting in a year for the company's American business.

The measure is a key indicator of a restaurant chain's performance because it excludes growth at sites that open or close during the year.

Bernstein analyst Sara Senatore said she McDonald's emphasis on drinks and even cheaper-than-usual prices was helping it woo diners.

"We believe the beverage center initiative is allowing (McDonald's) to attract sales from those customers that are feeling better about the economy and willing to spend more, while a focus on the core and the Dollar Menu holds on to customers still seeking extreme value," she wrote in a research note.

During the depths of the recession, sales sputterred at restaurant chains around the country as diners stayed home and counted their pennies. McDonald's fared better than most, though eventually even it began to feel the pinch.

Now, though, restaurants have seen people more willing to spend money on dining out again — gradually. When diners do decide to eat out, they're still looking for cheap meals, which means companies like McDonald's are pulling in more cash.

"McDonald's continues to connect with customers through our outstanding menu variety and compelling value, unbeatable convenience and contemporary restaurants," McDonald's CEO Jim Skinner said in a statement.

In Europe, the figure climbed 5.3 percent while it rose 3.9 percent in other regions.

"We remain confident that (McDonald's) can sustain global operating momentum in the balance of 2010," Baird analyst David Tarantino told investors in a research note.

McDonald's has more than 32,000 restaurants around the world. It's based in the Chicago suburb of Oak Brook, Ill.

Also Monday, Mary Dillon, McDonald's global chief marketing officer, announced she was leaving the fast-food chain to become the new CEO of U.S. Cellular Corp. Dillon will take the helm of the wireless provider when CEO John E. Rooney retires June 1.

Its shares rose $2.60, or 3.8 percent, to $70.61 in after trading amid broader market gains.