McDonald’s Pushes Ahead with ‘Experience of the Future’

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Delivery, digital and Experience of the Future are driving “sustained growth,” CEO says.

McDonald’s Pushes Ahead with ‘Experience of the Future’

McDonald’s Corp. is moving ahead “with the most significant transformation ever undertaken” and modernized more than U.S. 1,000 stores during the quarter, President and CEO Steve Easterbrook said during an Oct. 23 earnings call with analysts.

By the end of 2019, more than 12,000 McDonald’s locations in the U.S. will have digital menu boards, self-ordering kiosks, an updated look and delivery. 

“They still have hard work ahead, but we are seeing an encouraging response from customers in restaurants when many of these improvements are already completed,” he said.

Customer satisfaction is higher, despite wait times being a bit longer, he added. “This is in line with our experience in other McDonald's markets such as Canada, the U.K. and Italy that executed the program several years ago that was similar to the one the U.S. is undertaking now.”

Not only is customer satisfaction higher, the stores that offer the improved experience have seen an increase in check sizes.

“Initiatives deployed across the U.S., from delivery to self-order kiosks, also contributed to the higher check,” said Kevin Ozan, Chief Financial Officer. “The U.S. plan is grounded in the importance of delivering a mix of higher average check and comparable guest count growth. As guest counts remain a challenge, we're focused on increasing customer visits.”

For the third quarter ended Sept. 30, 2018, McDonald's Corp. posted “13 consecutive quarters of positive global comparable sales. We have made substantial progress modernizing restaurants around the world, enhancing hospitality and elevating the experience for the millions of customers we serve every day,” said Easterbrook. “We remain confident that our strategy will drive long-term, profitable growth."

What’s Driving Growth?
“Delivery, digital and Experience of the Future are proving to be catalysts for sustained growth,” explained Easterbrook. “As we continue to maximize the impacts of these accelerators, we are expanding choices, enhancing convenience and elevating the overall experience for McDonald's customers.”

McDonald’s plans to expand delivery.  To date, more than 15,000 McDonald’s worldwide offer delivery, and is expanding its global partnership with third-party delivery service Uber Eats. By the end of the year, 9,000 U.S. stores will offer delivery.

In the U.K, Australia and France, delivery now represents as much as 10% of sales, and customer satisfaction remains high, Easterbrook said.

We're focused on expanding coverage, growing demand and innovating to increase efficiency and provide better service to our customers,” Easterbrook said.

Looking to gain added efficiencies, McDonald’s is integrating delivery orders into its POS systems in some locations. “We are exploring additional innovation opportunities ranging from integrating delivery ordering through our mobile app to new packaging that will protect the quality of our food to new approaches that improve efficiency at our restaurants with the highest delivery volumes. Underpinning everything we do with this growth accelerator is our commitment to make delivery easy and convenient for our customers,” Easterbrook said.

The global QSR is also adding self-ordering kiosks and has them in 15,000+ locations. In European markets, customers have embraced ordering through the self-ordering kiosks. “In France, Italy and Spain, well over half of all in-restaurant visits are transacted through the kiosk,” Easterbrook said. The kiosks are supported by “guest experience leaders.” Some locations also have table service.

McDonald’s continues to engage customers through its global mobile app. During the quarter, downloads and registered users in the U.S. market doubled, driving more transactions through the app. “As this base of active users grows and the rate of mobile order and pay adoption increases, we are providing our guests greater convenience on their terms while gaining deeper insights on their purchasing behavior,” said Easterbrook. “All of this is helping us create a foundational base of information upon which we will build programs to deepen our customer relationships.”

China, McDonald’s largest market outside of the U.S., continues to lead in innovation. About 75% of all locations in China have embraced the Experience of the Future concept to date. And the Chinese locations are “system leading for us in terms of delivery.” One Beijing location has a dedicated delivery pickup area – that’s separate from walk-in customers – in the front of the restaurant.   

McDonald’s operates more than 37,000 restaurants worldwide.