Fries Frame: Decrease in Business Trumps Increase in Healthier Options

Two of the largest fast-food chains saw interesting fluctuations in profits at the end of April, with McDonald’s reporting that sales were down globally but up in the U.S. and Wendy’s announcing a first-quarter net income drop of 83 percent from year-ago results. The former, which has now been in operation for more than 70 years, says that sales at stores open at least a year were down 0.6 percent globally while U.S. sales were up by 0.7 percent. Mickey D’s could attribute the American increase to the introduction of its chicken McWraps and other healthier options, as well as additions to its dollar menu, all of which drew in customers in their 20s and 30s. However, McDonalds saw same-store sales fall by 2.4 percent in Europe, its biggest market by sales. In the grouped region of Asia, the Middle East and Africa, the same figure was down by 2.9 percent, which the burger franchise blamed on the impact the avian flu had on sales in populous China. Although Wendy’s first-quarter net income fell 83 percent from year-ago results, the chain’s adjusted earnings matched the expectations set by Wall Street, as last year’s figure included a big gain on the sale of an investment. Wendy’s is continuing its efforts to reposition itself on the high end of the fast-food spectrum with quality menu options and remodeled restaurants with a more modern and inviting twist that include fireplaces and flat-screen TVs. Although its figures currently seem less-than-promising, with the chain earning $2.1 million, or a penny per share, down from $12.4 million, or 3 cents per share, one year earlier, the chain hopes that the aforementioned ongoing improvements will, in time, turn the numbers around. With the fast-food sector seeing shifts toward more upscale atmospheres and healthier options made from quality ingredients, how is your franchise getting ahead of the curve to stomp out the competition in today’s market? For a sneak peek inside McDonald's test kitchen in Chicago, as well as interview with CEO Don Thompson, check out the video below, courtesy of CNBC's Nightly Business Report.