The Globe and Mail reports in its Tuesday edition that McDonald's reported a surprising rise in global comparable sales for the fourth quarter, boosted by demand for cheaper items in the Middle East, Japan and China. A Reuters dispatch to The Globe reports that shares rose 5 per cent in early U.S. trading, despite a significant drop in U.S. comparable sales due to an E. coli outbreak and cautious spending. Demand pressure on fast-food chains in the Middle East is easing after informal boycotts of Western brands due to their pro-Israeli stance in the Gaza conflict. McDonald's saw surprising sales growth in the region, offsetting a 1.4-per-cent drop in the U.S., its largest market since the pandemic. KFC parent Yum Brands also reported positive sales growth in the Middle East. McDonald's and its rivals leaned on value meals in 2024 to spur spending among customers preferring to eat meals at home. Northcoast Research analyst Jim Sanderson says, "Value is helping McDonald's recover traffic from lower-income consumers, but that expansion of value will pressure store profits, which will make it difficult to drive stronger earnings longer-term." McDonald's has not provided a timeline for ending the company's discount push.
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