McDonald’s profits plunge while Macca’s deliveries in Australia spike

The iconic fast food chain has revealed that profits plunged during the coronavirus pandemic, but its Australian division outperformed.

McDonald’s has revealed massive losses to its global business inflicted by the coronavirus pandemic, with profits plunging nearly 70 per cent over the year.

The result is a sobering reminder that even the world’s biggest brands are exposed to the financial crisis ahead of the earnings reporting season kicking off in earnest next week for Australia’s publicly listed companies.

In the update to investors overnight, Macca’s said it plans to position its US business to cater for the cash-strapped population struggling with everyday expenses during the deep recession.

Its “marketing war chest” will pitch itself as an affordable option solution as consumer confidence collapses.

RELATED: From $44m disaster to $1b market leader

RELATED: Why record gold price a ‘sign of trouble’

McDonald’s chief executive Chris Kempczinski cautioned there are “a lot of warning signs out there that would suggest the consumer sentiment and consumer concerns about the economy is negative and going in the wrong direction”.

“The vagaries of the pandemic create an unpredictable operating environment,” he said on a conference call with analysts.

“In many markets around the world, most notably the US, the public health situation appears to be worsening.”

Social distancing measures have taken a massive chunk out of the McDonald’s business. Picture: Noah Seelam/AFP

Earlier in the year, just 75 per cent of the chain’s 39,000 global stores were open as revenue collapsed 30 per cent to $US3.8 billion ($A5.3 billion).

About 96 per cent of the stores are now open as the recovery for sales picks up, which has been accelerated by markets that focus on drive-through service.

Performance is returning at a more steady rate for its business in Australia and Japan, where the sales are already stronger than they were in 2019.

McDonald’s deliveries have spiked in recent months within Australia, which now makes up 10 per cent of its total local sales.

“It’s time for us to get back on the front foot,” Mr Kempczinski said. “But it also means that we’re going to be thinking about the role affordability and value can play.”

Macca’s profits plunged nearly 70 per cent over the year. Picture: Charly Triballeau/AFP

Though the virus crisis has had devastating impacts on local and international business, not all companies have struggled.

Online furniture retailer Temple & Webster has benefited from consumers being trapped indoors during the lockdown, on Tuesday reporting a near 500 per cent surge in earnings.

“There are a lot of people in all age brackets, income brackets and all demographics are turning to online out of necessity so it’s our job to make sure they have a great experience,” chief executive Mark Coulter told news.com.au.

Temple & Webster’s share price has lifted nearly 200 per cent this year –— closing at $A8.23 on Tuesday – with the company now worth nearly $A1 billion.

But this is minuscule in comparison to Amazon as the global e-commerce giant’s share price soared by a whopping 70 per cent since January. Last week it reached a record high $US3197 ($A4479).

This allowed the fortune of founder and world’s richest man, Jeff Bezos, who still owns 11 per cent of the retail empire, to increase by $US74 billion ($A104 billion) since January.