McDonald’s today said it is taking an “enhanced grilling approach” to unlock more flavor in its burgers and implementing a series of process and formulation changes as part of a bold new growth strategy called ‘Accelerating the Arches’.
The strategy includes a refreshed purpose to feed and foster the communities that the chain serves around the world, updated values that guide actions and behaviors, and growth pillars that build on its competitive advantages.
Menu classics such as the Big Mac, Quarter Pounder, Chicken McNuggets and fries currently make up about 70% of food sales across McDonald’s top markets.
With demand for the familiar more important than ever in these uncertain times, the company said it expects these core items to continue to be significant drivers of growth thanks to both their popularity and profitability.
And the firm vowed to build on its heritage in burgers by implementing a series of operational, process and formulation changes. These include using new buns toasted to golden brown and an enhanced grilling approach to unlock more flavor.
McDonald’s also believes it has a significant opportunity to expand its chicken offerings, a category that is growing faster than beef. This includes leveraging the global strength of Chicken McNuggets and the McChicken sandwich, and investing in new line extensions and flavours.
It also means continuing to offer food that aligns with current consumer trends and taste profiles, like spicy. To continue building on its chicken portfolio, the company plans to introduce a new Crispy Chicken Sandwich in the US early next year.
McDonald’s said it would also double down on digital, delivery and drive-thru.
Delivery is booming and the use of the McDonald’s app has surged as more customers are ordering and paying for their food on mobile devices.
To unlock further growth, the company will accelerate technology innovation so that the tens of millions of customers who interact with it each day can enjoy a fast, easy experience that fits their needs at the moment.
The company expects digital sales to exceed $10 billion or nearly 20% of systemwide sales across its top six markets in 2020.
In the past three years, McDonald’s has expanded the number of restaurants that offer delivery nine-fold, to about 28,000 restaurants.
Building on this progress means enhancing the delivery experience for customers. This includes the ability to order on the McDonald’s app, which is already available in several markets around the world, and optimising operations with a focus on speed and accuracy.
McDonald’s has a drive-thru in approximately 65% of its restaurants around the world and, in the US, nearly 95% of the approximately 14,000 locations have a drive-thru. Globally it now has 25,000 drive-thru lanes worldwide.
During Covid-19, this channel has heightened importance and will be even more critical in the future to meet demand for flexibility and choice.
McDonald’s, which is budgeting for capital expenditure of approximately $2.3 billion next year – around half of which will be directed towards new unit expansion – plans to maximize the advantages of its strong drive thru presence by testing new concepts and technology to make the customer experience even faster.
This includes innovations to provide a quicker, more convenient experience such as automated order taking; a new drive-thru express pick-up lane for customers with a digital order; and a restaurant concept that offers drive-thru, delivery and takeaway only.
McDonald’s reinvigorated strategy is underpinned by a relentless focus on running great restaurants and empowering restaurant crew, it said.
The chain has reduced its drive thru service times by about 30 seconds over the past two years in its largest markets, on average. It will continue to focus on driving efficiencies in its operations to enhance the customer experience.
With safety, hygiene and customers’ trust and confidence in its restaurants critical, the company said it has established even greater discipline in how sites are run to meet those needs.
To support these efforts, McDonald’s has retained Mayo Clinic to provide consulting services regarding cleanliness, health and safety to mitigate the spread of Covid-19.
“In countries around the world, we have seen customer behaviors change at an unprecedented pace over the last several months,” said McDonald’s president and CEO Chris Kempczinski. “By embracing a bigger, more holistic vision for the future, Accelerating the Arches defines how McDonald’s will deliver value to all stakeholders by providing a clear roadmap of what we can do for the millions of customers, in the thousands of communities, we serve each and every day.
“With our new growth strategy, we will build on our inherent strengths by harnessing our competitive advantages and investing in innovations that enable us to continue to offer fast, easy moments for our customers.”
McDonald’s currently operates 39,000 locations in more than 100 countries. Approximately 93% of its restaurants are run by franchisees.