What's going on?

McDonald’s reported quarterly earnings on Thursday that were below expectations, but there�s a light at the end of the golden arches.

 

What does this mean?

Europe was crippled yet again by another wave of lockdowns last quarter, and McDonald�s felt the impact: it sold fewer Big Macs and McFlurries, and spent more on safety equipment and marketing itself as a home delivery go-to. That one-two punch hurt its revenue and profit, which came in below analysts’ forecasts.

But there was better news on home turf: the company�s sales in the US jumped to 5.5% from the previous quarter�s 4.6%. That might have something to do with the fact it has more drive-throughs than it does in Europe, making it a whole lot easier to maintain social distancing rules. Its promotional pushes seemed to be working too, with long-standing favourites and newfangled crowd-pleasers alike selling like hotcakes.

Why should I care?

The bigger picture: Drive-throughs never looked so good.

Big chains like McDonald�s and Starbucks � which reported strong earnings of its own earlier in the week � are doing better than the rest of the restaurant industry. That might be because of their sheer size: they can adapt to social distancing guidelines more easily than their independent rivals, and offer cheap, no-frills food in these tough economic times. And the future looks bright: analysts reckon McDonalds will dominate the restaurant industry even once the pandemic’s lifted.

Zooming out: Americans are turning to burgers and booze.�
Americans weren�t just tucking into fast food last quarter: the world�s biggest spirit maker Diageo reported a surprise surge in sales for the six months till January compared to the previous year. Turns out Americans have been drinking more tequila at home than Europeans aren�t drinking in bars. And that�s in keeping with wider drinking trends during the pandemic: everyone is choosing spirits over beer and wine during the pandemic, and trying to turn nights in into� well, nights out.