McDonald’s Grimace Shake Trend Pays Off for Burger Chain
Meal celebrating purple character rings up sales after it goes viral on TikTok McDonald’s has had recent successes with its marketing and meals. Photo: Justin Sullivan/Getty Images By Heather Haddon Updated July 27, 2023 10:24 am ET Grimace delivered for McDonald’s . A meal celebrating the “birthday” of the retro purple mascot last month helped drive McDonald’s U.S. same-store sales up 10.3% in its second quarter from a year earlier. Consumers trying the meal’s Grimace shake and then posting video clips of their reactions on TikTok translated into a surprising boost for the chain, according to McDonald’s. The burger company has outperformed many of its U.S. rivals this year with new marketing campaigns and a focus on core menu items such as burgers and chicken.
McDonald’s has had recent successes with its marketing and meals.
Photo: Justin Sullivan/Getty Images
Grimace delivered for McDonald’s .
A meal celebrating the “birthday” of the retro purple mascot last month helped drive McDonald’s U.S. same-store sales up 10.3% in its second quarter from a year earlier.
Consumers trying the meal’s Grimace shake and then posting video clips of their reactions on TikTok translated into a surprising boost for the chain, according to McDonald’s. The burger company has outperformed many of its U.S. rivals this year with new marketing campaigns and a focus on core menu items such as burgers and chicken.
McDonald’s said menu price increases and more customer orders also helped boost its U.S. sales.
Chain executives Thursday, however, said that the macroeconomic picture remains challenging around the world, with inflation hurting restaurant operators and customers. Consumer sentiment hasn’t rebounded from prepandemic levels, the company said.
“There continues to be a lot of pressure on consumers,” McDonald’s chief financial officer Ian Borden told investors Thursday.
Company shares were up 1.83% to $297.07 in Thursday morning trading.
McDonald’s said that it has benefited this year from U.S. consumers buying their fast food instead of going out for a sit-down meal but that some lower-income customers this year are ordering fewer items. Customer visits remain strong though, McDonald’s said.
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Inflation is still high but starting to moderate for McDonald’s restaurants, the company said. U.S. prices remain elevated from before the pandemic after restaurants pushed through increases last year in response to escalating costs for food, materials and labor, McDonald’s said.
McDonald’s said it is planning to build more restaurants this year and is experimenting with new types of formats. The chain said Thursday that it would start a new concept, called CosMc’s, named after an alien mascot featured in past McDonald advertisements. McDonald’s will open some of the smaller-format sites in a handful of areas early next year, the company said.
The burger company’s U.S. sales during its second quarter benefited from a tribute meal to its purple mascot, Grimace, which turned 52 years old on June 12. Videos of customers drinking the signature Grimace Milkshake and pretending to die went viral, with posts tagged #grimaceshake generating billions of views on TikTok.
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The chain has had recent successes with its marketing and meals tied to celebrities. Its Cactus Plant Flea Market Box, a Happy Meal geared toward adults, generated U.S. sales last year. The themed toys also quickly sold out.
Chicago-based McDonald’s on Thursday reported net income of $2.3 billion for the quarter ended June 30, up 94% from a year earlier. Earnings per share were $3.17 when adjusting for charges related to layoffs conducted by McDonald’s earlier this year and other one-time items. Analysts polled by FactSet expected $2.78 a share.
The burger company reported $6.5 billion in sales for the most recent quarter, exceeding analysts’ expectations of $6.3 billion. Quarterly revenue grew 14% from a year earlier, the company said.
McDonald’s has said it has benefited from an increase in sales through its app, which speeds up transactions and helps the burger company learn more details about its customers. The company reported digital sales in its six largest markets of around $8 billion for the quarter, up from around $6 billion a year earlier.
Write to Heather Haddon at [email protected]
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