Can Extra Hours Save This Retailer's Quarter?
Retailers have a few trusty levers they can pull to goose sales this time of year. Of these, price cuts are the biggest. Nothing drives traffic like a splashy promotion on a popular product.
But the tactic of staying open longer or pushing operating hours into holidays is one that a growing number of companies are using this year. And it's working like a charm. Especially for McDonald's .
The company surprised analysts last week with a big jump in same-store sales in the U.S for the month of November. The Street had been expecting a slight drop in revenue after the company reported a 2.2% fall the month before. But McDonald's announced strong sales growth instead, including a 2.5% bounce in U.S. sales. The quick return to robust growth had a lot of people asking just how McDonald's managed such a quick turnaround. Was the Cheddar Bacon Onion Sandwich that big of a hit?
Now we have at least part of the answer. According to Advertising Age, a big portion of that sales boost came from the fact that more McDonald's locations were open on Thanksgiving Day this year. That extra day of operations could have been responsible for about 1% out of the 2.5% boost that the company reported.
Plenty of retailers are playing the extra-hours game this season. Macy's , for example, plans to stay open for 48 straight hours next week. Wal-Mart and Target both pushed their Black Friday specials into Thanksgiving Day. And those moves paid off. Wal-Mart saw 20 million people visit its stores on the Thanksgiving Day holiday.
McDonald's executives were so cheered by their own Thanksgiving results that they're encouraging their franchisees to open up on Christmas Day, too. The Advertising Age article quotes an internal memo from company executives telling franchisees that Christmas Day represents McDonald's "largest holiday opportunity."
If the company succeeds in convincing more of its operators to open up for Christmas, McDonald's could report surprisingly strong comparable sales in the fourth quarter. One extra day can make a big difference in a quarter. But, unfortunately for the fast-food king and other retailers, that's an extra boost that only works once.
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The article Can Extra Hours Save This Retailer's Quarter? originally appeared on Fool.com.Fool contributor Demitrios Kalogeropoulos owns shares of McDonald's. The Motley Fool owns shares of McDonald's. Motley Fool newsletter services recommend McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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