McDonald's Details COVID-19 Impact

Anna Wolfe
Senior Editor, Restaurants
Approximately 75% of McDonald's locations around the world are operational, the majority of which have adapted to focus on drive-thru, delivery, and/or takeout.

In advance of its quarterly earnings announcement scheduled for April 30, McDonald's has released details on how its business has been impacted by the COVID-19 pandemic.

“This unprecedented situation is changing the world we live in, and we will need to adapt to a new reality in its aftermath,” said President and Chief Executive Officer Chris Kempczinski in a statement. “…  We are implementing measures across markets to keep customers and crew safe, such as contactless drive-thru and delivery, social distancing guidelines, protective equipment for crew and enhanced hygiene and cleaning procedures.

To date, the QSR has not experienced any breaks in its supply chain. Approximately 75% of its restaurants around the world are operational, the majority of which have adapted to focus on drive-thru, delivery, and/or take-away.  

In the U.S., all restaurants are operating drive-thru, delivery, & take-away only; subject to local restrictions, dining rooms are operating at the restaurant’s discretion. Some locations have limited menus and hours. Restaurants that are closed are primarily due to their locations. (For example, locations inside shopping malls.)

Several markets, such as FranceItalySpain and the United Kingdom, have fully closed all restaurants. In China, 98% of the locations have resumed operations, “although the market continues to experience a reduced level of demand as consumers have not fully returned to their pre-COVID routines.”

2020 was off to a strong start before the pandemic, Kempczinski explained.  “Beginning in mid-March, we experienced a significant decline in our results that varies across markets. The variation reflects the different levels of consumer behavior and government response,” he addedi. “The situation remains fluid, and as the duration and scope of COVID-19 continues to evolve, it is not possible to estimate the full extent of the impact on our business at this time.”

Maintaining Control

Kempczinski said the QSR remains focused “on what we can control to manage through this crisis.” That includes suspending its share buy-back program, increasing its cash position to $6.5 billion in the debt markets, and reducing capital expenditures this year as a result of fewer Experience of the Future projects across the U.S. and a reduced number of new restaurant openings in around the world.

Due to the uncertainty of the COVID-19 pandemic, McDonald’s is among the publicly traded companies that have withdrawn their 2020 outlook.

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