Europe is not exactly a growth market for most US companies. The economy there is slowing much as it is in America. But, McDonald's (NYSE: MCD) may be an exception. According to Bloomberg, "McDonald's Corp., the world's largest restaurant company, may report a second-quarter profit after European sales rose twice as fast as in the U.S."
The news is unusually good because rising commodities prices are likely to squeeze the fast food company's margins. The costs of bread and meat have been up sharply over the last year.
Europe seems an unlikely savior for McDonald's numbers. It is often viewed as a region where good food and traditional cuisine are part of the culture. Who wants a hamburger from a fast food place when the local restaurant has crepe suzette?
But fast food, filled with fat and salt, is irresistible. McDonald's has proved that in every country where it does business.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
7-22-2008 @ 1:00PM
meadow said...
I guess when times are tough, even people with good taste will eat anywhere. Who can afford to spend 5 euro on a crepe suzette when you can eat a big mac for 2.
7-22-2008 @ 10:08PM
Kent said...
I visited Paris a few years ago and was amazed to see that MacDonald's restaurant on Champs Eysee was packed with people. I didn't ask if they were American or French customers. Being an American tourist, I ate at one of the French cafes instead. So the news about MCD's revenue growth in Europe comes as no surprise.