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McDonald’s has been a global icon, ever since it launched in 1940 in San Bernardino, CA.
Fast forward 75 years and McDonald’s is trying to earn back trust and customer loyalty. Company sales, particularly in the U.S., have slipped in recent years.
“Our turnaround plan represents a significant step change in McDonald’s and establishes the foundation for our transformation as we work toward becoming a modern progressive burger company,” McDonald’s CEO Steve Easterbrook said during the company’s July 23 second-quarter earnings conference call, according to Seeking Alpha. “Our No. 1 priority is to return critical markets to sustainable growth by regaining customers’ trust and loyalty. These efforts must be led by the markets, local management, and franchisees working together to deliver what people want from McDonald’s, great tasting, quality food at a value, delivered with a better service each and every time they visit.”
Easterbook said the company’s focus for the past several months has been execution, transformation, and challenging the organization to evolve more quickly.
“We made a fundamental shift in a way our business is organized (since July 1) to eliminate redundancies, maximize talent, and create a greater sense of urgency among companies and operator leadership staff, as well as with our suppliers,” Easterbrook explained. “This restructure arguably represents the biggest organizational change in our history, yet from inception to execution, we completed it in just two months. It requires significant change inside the company. And we are already realizing some of the benefits, stronger discipline, sharper customer focus, a more acute sense of urgency and a deeper understanding of what legacy thinking and actions to challenge and how.”
Results in the U.S., which represents more than 40% of McDonald’s total business, have been disappointing, Easterbook noted.
“We are committed to changing the trajectory of the business and arresting the nearly three years of decline,” Easterbrook said. “We are working to promote discipline back into the business, adapt more quickly to changing trends, offer more compelling value across the menu, and bringing new energy and tenacity to simply running better restaurants. The localized structure implemented early this year was an important first step. It’s designed to liberate market teams to be more responsive to local consumers.”
Easterbook said McDonald’s has enhanced the customer service experience.
“This starts with the basics,” he explained. “We have reduced the number of menu items in restaurants to make it easier for teams to deliver better service. We are improving the speed of our drive-throughs with simplified menu boards. We have cut the number of items displayed by about a third, yet still highlight the items to deliver 80% or more of drive-through sales. We are addressing order accuracy with new operational procedures and training programs already in almost half of our restaurants. And we are increasing the number of dual line drive-throughs to deliver faster service to our customers during the busiest times of the day.”
Last week the company launched the McDonald’s app, called McDonald’s Mobile. For now, it’s only available in the San Diego area, although the fast food chain has plans to release the app in New York and then roll it out nationally by October.
Currently, the app has a few features like a store locator, menu, nutritional facts for their products, access to coupons and discounts, and a drink loyalty program. The loyalty program, which will only last until the end of this year, allows customers to earn a free drink after purchasing five McCafe drinks.
“This is part of our global digital strategy that, over time, is designed to streamline and improve the entire customer service experience,” Easterbrook said, referring to the app launch. “The initial version of the app will make it easy for consumers to receive value when they choose McDonald’s through features like tail adopters that are easy to redeem and rewards for regular purchases of their favorite McCafé beverages. And at the same time, the team is already hard at work, developing additional features to hasten the shift from mass communication to personal one-to-one engagement with customers in the future.”
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