Big Mac comes up with a su­per-sized menu for change in seven sec­onds

China Daily (Hong Kong) - - Q & A WITH CEO -

C H I C A G O — Mc D o n a l d ’s the dom­i­nant player in con­ve­hopes to turn around its nience, as con­ve­nience was for­tunes by sav­ing seven de­fined in those days,” Steve sec­onds at a time. Easter­brook, the com­pany’s

The high street gi­ant that chief ex­ec­u­tive of­fi­cer, said helped de­fine fast food is last month. mak­ing su­per­sized ef­forts “But con­ve­nience con­tin­uto reverse its fad­ing pop­ually gets re­de­fined, and we lar­ity and catch up to a haven’t mod­ern­ized,” he add­land­scape that has evolved ed. around it. The push came after

That in­cludes expanding McDon­ald’s stock hit all-time de­liv­ery, dig­i­tal or­der­ing highs as in­vestors cheer a kiosks in restau­rants, and turn­around plan t hat has rolling out an app that saves in­cluded cut­ting costs and pre­cious sec­onds. ex­pan­sion over­seas.

Much of the work is on dis­Yet the as­ter­isk on the play in an un­marked ware­head­lines is the chain’s house near the com­pany’s de­clin­ing stature in its flag­head­quar­ters in sub­ur­ban ship US mar­ket, where it is Chicago in the United States, fight­ing in­ten­si­fy­ing com­pe­where a blowup of a mo­bile tition, fickle tastes and a per­phone screen shows the app sis­tent junk food im­age. launch­ing na­tion­ally later In an in­creas­ingly crowded this year. field of places to eat, the num

McDon­ald’s es­ti­mates it ber of McDon­ald’s lo­ca­tions bet­ter fit into life­styles in the would take 10 sec­onds for a US.intheUSis­set­toshrink­for cus­tomer to tell an em­ploy­eeL the third year in a row. ots of once-dom­i­nant res­their or­der num­ber from the At es­tab­lished lo­ca­tions, tau­rant chains are feel­ing the app, down from the 17-sec­ond the fre­quency of cus­tomer pres­sure of peo­ple hav­ing av­er­age of or­der­ing at the vis­its has de­clined for four more eat­ing op­tions. drive-thru, a dif­fer­ence that straight years even after the Last year, an es­ti­mated could help ease pile­ups. launch of the pop­u­lar “All613,000 places were sell­ing

Else­where at the In­no­vaDay Break­fast” menu. ei­ther food or drink in the US, tion Cen­ter, the dig­i­tal or­derThe chain that pop­u­lar­ized an in­crease of up to 17 per­cent ing kiosk shows how in­no­va­tions such as drive­from a decade ear­lier, ac­cord­cus­tomers can skip lines at thrus in the 1970s ac­knowl­ing to gov­ern­ment fig­ures. the reg­is­ter. edges it has been slow to Su­per­mar­kets and conve

“Five, 10 years ago, we were adapt, and is scram­bling to nience stores are of­fer­ing more pre­pared foods, and meal-kit de­liv­ery com­pa­nies have been expanding.

“Bet­ter burger” places like Shake Shack and Habit Burger Grill do not come close to McDon­ald’s roughly 14,000 US lo­ca­tions, but they are grow­ing.

“They’re still tak­ing cus­tomers from the same mar­ket pool,” said Nick Kar­avites, a McDon­ald’s fran­chisee with 22 lo­ca­tions in the Chicago area.

Richard Adams, a for­mer McDon­ald’s fran­chisee who is now a con­sul­tant to those busi­nesses, has ques­tioned whether the chain can re­turn to the height of its pop­u­lar­ity in such a frag­mented mar­ket­place.

He also noted that many of the new of­fer­ings the com­pany is pur­su­ing, such as de­liv­ery, are al­ready avail­able at other places. “They’re fol­low­ing the mar­ket­place,” he said.

Still, McDon­ald’s needs to make changes to keep cus­tomer vis­its from fall­ing fur­ther.

One main fo­cus is the driv­ethru, where McDon­ald’s gets roughly 70 per­cent of its busi­ness.

Cus­tomers who place or­ders on the app, for in­stance, could also pull into a des­ig­nated park­ing spot where an em­ployee would bring out their or­der.

That would the­o­ret­i­cally ease back­ups at the drive-thru, which in turn might pre­vent po­ten­tial cus­tomers from driv­ing past with­out stop­ping dur­ing peak hours.

Then there’s the part­ner­ship with UberEats to of­fer de­liv­ery. So far, McDon­ald’s says de­liv­ery is bring­ing in new busi­ness dur­ing slower times at the roughly 3,500 lo­ca­tions where it has rolled out since the start of the year.

Ei­ther way, such changes are not likely to trans­form oper­a­tions overnight, since most of McDon­ald’s cus­tomers might pre­fer to or­der the way they al­ways have.

“That’s like turn­ing a very large ship,” said Kar­avites. At his re­mod­eled restau­rant in Chicago where de­liv­ery was re­cently launched, he said sales are al­ready climb­ing.

To bring more peo­ple in over the short-term, the com­pany is pro­mot­ing $1 so­das and $2 McCafe drinks. Glass cases dis­play­ing baked goods are also pop­ping up in stores.

And at about 700 lo­ca­tions, the com­pany is test­ing “dessert sta­tions” be­hind the counter where em­ploy­ees can make sun­daes topped with cake or brownie chunks.

Those sta­tions could even­tu­ally han­dle an ex­panded menu of sweets. And that model could be rolled out across the whole group

“I wouldn’t un­der­es­ti­mate the power of scale,” said Sara Se­na­tore, an an­a­lyst at Bern­stein Re­search, re­fer­ring to the num­ber of McDon­ald’s.

the num­ber of McDon­ald’s out­lets in the US mar­ket share of driv­ethru taken by McDon­ald’s

BLOOMBERG

Steve Easter­brook, pres­i­dent and chief ex­ec­u­tive of­fi­cer of McDon­ald's Corp.

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