Whopper Profits! Why Australia Is McDonald’s’ International Success Story

Whopper Profits! Why Australia Is McDonald’s’ International Success Story
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The Australian branch of McDonald’s has been commended for its successes during the COVID-19 pandemic, particularly thanks to Home Delivery.

2020 saw McDonald’s Australia reach its highest ever level of profitability for franchise owners as customers began trying home delivery for the first time. McDonald’s global CEO and company president Chris Kempczinski highlighted the brand’s success in the Australian market in a recent investor update.

The upwards trajectory of McDonald’s in Australia is a stark contrast to the company’s global endeavors. While revenue increased consistently last year in Australia,  same-store sales around the world decreased by 7.7%.

In July 2020, the company reported its worst global sales in fifteen years, a fact they blamed on the COVID-19 pandemic and its effects on indoor dining.

Even before the pandemic though, McDonald’s was seeing decreasing customer attendance. In their 2019 fourth quarter report, McDonald’s found that customer traffic was steadily declining.  The ‘All Day Breakfast’ initiative was rolled out in 2016, in the hopes it would increase sales, but saw complaints from staff. While ‘All Day Breakfast’ is still available in Australia, it stopped in the US last year – potentially permanently.

McDonald’s sales have been falling globally since at least 2015. The success of the brand in Australia, then, is especially significant.

McDonald’s Australia doubled its home delivery volume last year, likely because of the increased emphasis on deliveries as a result of the pandemic. However, Australian businesses were faced with less extensive pandemic closures than those in the US and Europe. Partnerships with home delivery apps like UberEats was essential to the brand’s success.

Andrew Gregory, McDonald’s Australia CEO told The Australian that, “the population have tried delivery during COVID and many people have stuck with it. A lot of people wouldn’t have tried it if it wasn’t for COVID, they have now tried it, it works and is very convenient.”

McDonald’s is one of Australia’s biggest private-sector employers, with a staff force of 105, 000 across 1000 stores.

 

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