Inspiring news: McDonald’s reported that their profit has gone up to $1.28 per share and their revenue has climbed to $6.65 billion, making this quarterly report its eighth consecutive quarter of profit growth. All these were brought about by their concentration in selling cold beverages the past months instead of focusing on its usual bestsellers like hamburgers and chicken. Large sales turn-out of their cold beverages–Frozen Strawberry Lemonade and their Real Fruit Smoothies in wild berry, mango pineapple and strawberry banana flavors –made a great impact to this quarter’s profit margin, as the drinks throw in as much as 80% of its price to profit. This, as opposed to McDonald’s other products, such as hamburgers, which only gives 60% of its price to solid earnings.
As the price of meat went increasingly higher, McDonald’s relied more on the promotion of its McCafe beverages, said to have been inspired by Starbuck’s high profit on its drink products. They launched its McCafe specialty beverages in 2009, highlighting it in their menu boards and table tents, and slowly built up the brand to their customers, taking full advantage of the market’s positive response to gourmet drinks.
Last June they launched their “drinkcessorize” campaign with a similarly-titled fashion show in Rock N’ Roll McDonald’s, one of their outlets in North Clark Street, Chicago. The fashion show tied up with Akira Isogawa, one of America’s most celebrated and successful fashion designers, and featured his official summer collection. Models strutted on stage wearing glamorous summer outfits and holding McCafe drinks on their hands. The launch hoped to expand McDonald’s reach to consumers, this time the fashion market, and associate McCafe drinks with hip, fashion, elegance and glamour.
The world’s largest fast-food chain heavily advertizes its frozen beverages in their menu boards and table tents during warmer months and goes back to their usual hot McCafe products in the colder months. Such moves turned out to be a success, as the beverage products eventually comprised of about 20% sales at McDonalds branches across the country.
The report defied first quarter forecasts that the escalating food cost would put pressure on the company’s profit margins. They devised numerous ways to boost sales and at the same time exerted efforts not to affect its customers by increasing its prices. Among the many methods they thought of was to give closer attention to their premium burgers and their McCafe beverages, which is patronized by its higher-end market. And they didn’t fail.
Seeing the success of the large food chain, the others tried to follow suit. Arby’s advertised its jamocha Oreo milkshake, while Popeyes have their own beverage concoction of lemonade with Fanta Strawberry Soda. And we can imagine that plenty of other restaurants will adopt this strategy, too.
Consistent with its exemplary achievements the past months, McDonald’s also plans to make another mark as it announced to build its biggest outlet in Stratford, England, in time for the 2012 Summer Olympic Games in London. The two-story store, the fourth one erected near the Olympic park in east London, will have a floor area of 3,000 square meters (9,842 square feet) and is expected to hold 1,500 diners.
Already eyeing for another enormous profit report for next year, the chain plans to serve roughly 1.75 million meals on the 29-day duration of the London sports event. Truly an ambitious forecast – but with the McDonald’s team behind the prediction, that’s not really far from actually happening.