McDonald’s CEO Steve Easterbrook is very pleased with the company’s first-quarter performance, which came on the heels of momentum built from the end of 2015. During the company’s April 22 earnings call, Easterbrook touted the ongoing turnaround plan, superb execution, keen alignment, and an elevated customer experience.
“The momentum we’re experiencing is broad-based,” he explained, according to Seeking Alpha. “All business segments are contributing to our growth. The actions we are taking are driving noticeable change for our customers and giving them more reasons to visit McDonald’s. This is reflected not only in our financial performance, but also in the recent market share growth we’re seeing across most of our major markets. This success is driven, in large part, by our singular focus on executing the turnaround plan. Grounded in putting customers back at the heart of everything we do, we’re committed to running great restaurants and elevating all aspects of the McDonald’s experience.”
McDonald’s began 2016 in a manner consistent with it ended 2015, Easterbrook noted, “as a more focused, aligned system with positive momentum in every business segment.”
Global comparable sales increased 6.2%.
“Our biennial convention last week came at an opportune time,” he explained. “Nearly 14,000 owner/operators, suppliers, and employees from around the world gathered to galvanize around our biggest business opportunities: Our food; our people; the customer experience; and our brands. It was energizing to see everyone motivated to act and united around the opportunities we are seizing as we strive to be recognized as a modern, progressive burger company by our customers. When we align behind fewer bigger priorities, we activate our size and scale advantages like no other company in our industry.”
U.S. comparable sales rose 5.4% in the first quarter.
“All Day Breakfast continues to provide customers with new reasons to visit McDonald’s to enjoy their favorite breakfast food and beverages in the morning and lunch and throughout the day,” Easterbrook said. “In addition, All Day Breakfast fills a price gap on the menu. And customers are responding by trading up or adding All Day Breakfast items to their orders. While we’re no longer in the launch phase, this platform remains a significant contributor to top-line results, and we’re already looking at ways to extend it in the future in response to customers’ feedback.”
In the U.S., Easterbrook said McDonald’s has taken steps to fortify its appeal to value-conscious customers.
“The McPick 2 platform provides customers with more choices at compelling price points and it gives us added flexibility at both national and local levels,” he said. “We tested two versions of the platform in the first quarter: McPick 2 for $2 in January; and McPick 2 for $5 in March. The offerings were designed to target different customers, and both resonated well. Beyond All Day Breakfast and value, we’re pursuing additional opportunities to fuel momentum. This includes further enhancements of our core menu items to: Improve quality perceptions of our food; sustaining our heightened focus on operations, especially in our drive-thrus, to improve accuracy and speed of service; and additional opportunities to simplify our menu and the overall restaurant experience for our customers and crew. Customers in the U.S. are noticing a difference. We experienced a 6% improvement in our overall customer satisfaction scores compared to the first quarter of last year. And we are gaining share relative to the QSR sandwich segment, with a positive comparable sales gap of 140 basis points for the quarter.”