http://www.morningstar.com/earnings/58143154-mcdonalds-corp-mcd-q3-2013.aspx

McDonald's Corp MCD
Q3 2013 Earnings Call Transcript

Transcript Call Date 10/21/2013

The third point is affordability. We need to offer compelling value options across all price tiers of our menu.

Lastly, deepening consumer engagement with the McDonald's brand. This means creating stronger awareness and excitement around our menu and around our restaurants, while further revealing the ways in which we're a good neighbor in communities around the world.

We know that meeting customers' expectations in all of these areas is critically important to a great experience at McDonald's. We'll talk more about these tenants, including specific examples of actions we are taking around the world to elevate the McDonald's experience at next month's investor meeting on November 14th.

So let's take a look at the business across the globe starting with the U.S. U.S. comparable sales were up 0.7% for the quarter and operating income increased 5%. Our current sales performance was driven by a focus on bringing new and familiar taste to customers, exciting promotions and an ongoing emphasis on affordability across our menu. We accelerated the timing of our Monopoly promotion in an effort to further increase awareness and encourage trial of recent product introductions like Quarter Pounder line of sandwiches and the new McWraps. Monopoly also reminds customers about our core menu classics. It drives traffic and builds average check, while also engaging customers in a fun and familiar game experience that's only available at McDonald's.

We also introduced Mighty Wings in the third quarter as a limited time offer. This bold new flavor addition to our U.S. menu originated in China and Hong Kong and has encouraged trade up to increase average check. While overall performance of Monopoly and Mighty Wings met our internal targets, it was not strong enough to offset current guess count trends. Our promotions in new products are complemented by our consistent value approach to offer affordable variety and choice across the menu. The Dollar Menu remains core to our high-low strategy with products like the Grilled Onion Cheddar Burger and the popular McChicken continuing to generate strong demand at the $1 price point.

As we celebrate the 10 year anniversary of the Dollar Menu, we are leveraging the equity we have built to ensure we continue to satisfy our customers' expectations for affordability. The new Dollar Menu & More platform is designed to provide every day predictable value beyond the $1 price point and will be supported with the weight of our national advertising. The sandwich lineup, which ranges from $1 to $2 adds new flavors and taste that complement our existing menu favorites and provides additional pricing flexibility for the McDouble.

In addition to the launch of Dollar Menu & More, we're balancing proven favorites with new taste that adds further excitement and variety to our menu. The return of the popular McRib sandwich and the southwest premium McWrap, are examples of this flavorful balance that will be seen in restaurants within the United States.

Read our Earnings Call Transcript disclaimer.
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