McDonald's Serves Up A Fast Food, Fast Delivery Future

McDonald’s came to the ball with fast food and — after a few spins on the floor with salads, oatmeal and other enticing suitors gussied up in healthy raiments — it is sticking with it. It’s also revamping delivery worldwide with the launch of a mobile “order and pay” app this year that will accommodate curbside pickup and it told those assembled at its investors conference in Chicago yesterday that it is “experimenting” with other ways of getting Big Macs and new menu items to the masses.

“To grow, we must grow guest counts,” CEO Steve Easterbrook told the crowd as trading in its stock was temporarily halted as executives laid out their plans to investors, Charisse Jones reports for USA Today. “It’s as plain and simple as that.’’

Amplifying the message, Lucy Brady, the company’s SVP for corporate strategy and business development, said: “We’ve lost hundreds of millions of visits from our core customers — students, teachers, construction workers” and others.

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Those “others” add up to a whopping departure of those lovin’ it.

“After losing about 500 million U.S. orders over the past five years over failed attempts to widen its customer base, the fast-food chain said it is going to embrace its identity as an affordable fast-food chain and stop chasing after people who will rarely eat there,” Julie Jargon reports for the Wall Street Journal.

“The decision comes after the company conducted its largest-ever customer survey last year to understand why it was losing customers. The study showed that it was losing customers to other fast-food chains, not to fast-casual restaurants serving healthier fare,” Jargon continues.

Digital tech will play a big role in luring them back.

“Technology is disrupting everything around us,” Easterbrook said. “The question for McDonald’s: Do we want to be disrupted, or do we want to be the disruptor?” reports Jonathan Maze for Nation’s Restaurant News.

McDonald’s “says the kiosks it's already bringing to U.S. stores will be able to access customers' app profiles, which can store ‘customized favorites and preferred payment methods,’” Jackie Wattles writes for CNN Money

“The new app will also allow people to place orders for curbside pickup. And for diehard fans of the drive-thru windows that have been a hallmark of the restaurant's business — no more yelling your order through a car window. Customers can place an order via the app and then read a code to the drive-thru cashier.”

The new app “should reduce errors and significantly cut the time it takes to handle large, complex orders,” Reuters’ Lisa Baertlein writes. “The new initiatives could shift some 20% of drive-thru orders to curbside delivery and another 20% to drive-thru pickup only, executives said” about initiatives, which were first disclosed in November. 

Baertlein also points out that McDonald’s is behind competitors such as Domino's Pizza, Panera Bread and Starbucks in its use of digital technology. Notably, though, the rollout will be happening on les boulevards and straßes worldwide, as well as Main St.

“In a bullish presentation, the company said it saw significant untapped opportunity for delivery in its top five markets — the U.S., U.K., France, Germany and Canada. In each, there is a McDonald’s restaurant within three to five miles of 75% of the population, a key component to getting food delivered while it is still hot,” Lindsay Whipp reports for Financial Times. “Easterbrook said most delivery orders come in at the end of the day when its restaurants are less busy, giving the company a big market to exploit.”

Among other upgrades, interiors are getting a makeover. 

“The world's largest burger chain is remodeling its restaurants to feature the ‘experience of the future,’ a digitally forward dining model that includes kiosk ordering and Bluetooth-enabled table service. The remodels cost about $700,000 from the ground up, or as little as $150,000 for locations that require only modest updates,” Samantha Bomkamp reports for the Chicago Tribune.

“The company said that restaurants that have already been refurbished are producing sales gains of between 4 and 8%, and they also tend to lead to higher customer satisfaction scores.”

Although some of the healthier fare has been put out to pasture, McDonald’s also promised improved food quality yesterday.

“Expect to see McDonald's ‘step up’ its menu innovation in the U.S., said Chris Kempczinski, McDonald's USA president,” reports Sarah Whitten for CNBC. “The company recently launched three different sizes of its classic Big Mac and will continue to add new items to its domestic stores … including a nationwide roll out of its ‘Signature Sandwiches’ — customizable and more upscale burgers and chicken sandwiches — later this year.”

Investors evidently liked what they were served yesterday: McDonald’s stock finished up 1.1% on the day after trading resumed.

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