McDonald’s (MCD) 5 AM Start Time

July 27, 2007 by Douglas A. McIntyre

McDonald’s (MCD) is pushing to open all of its store at 5 AM on the premise that people are getting up earlier and earlier to get to work or care for children. The move is a good one. The additional labor costs are probably modest, but the competitive advantages could be substantial.

McDonald’s same store sales have been running in the 6% to 8% range recently and earnings have taken off. The company’s stock trades at a mult-year high.

But, because it has over 31,000 stores around the world and an especially high concentration of retail outlets in the US, it must keep introducing programs that will give it an end over other companies that offer coffee and food for breakfast, particularly Burger King (BKC) and Starbucks (SBUX).

McDonald’s appears to be continuing to differentiate itself from competition by doing whatever its takes to bring in new customers. It has changed it menu and some of its stores are open 24 hours.

Soon, the company will set up an automated system to call all of its customers at 4 AM so that they can start their days early.

Just kidding.

Douglas A. McIntyre