McDonald’s MCD unveils growth strategy

McDonald’s On Monday, the fast-food giant unveiled its latest global growth strategy to help it become customers’ first choice as it faces new competitors and consumer spending strained by higher gas prices.

A new restaurant design, tastier food and beverages, consumer-focused innovation and improved customer service are the four cornerstones of the company’s new plan, which it calls “McDonald’s > NEXT.”

Executives made the announcement at the McDonald’s biennial Worldwide Convention for franchisees, held this year in Las Vegas. The chain has released its latest global strategy, known as: “Speeding Up the Belts” In November 2020, its sales rebounded from the pandemic.

The expansion plan comes at a time when restaurants are competing for a smaller pool of customers and new chains such as Raising Cane’s and 7 Brew Drive Thru Coffee are threatening McDonald’s sales. McDonald’s, the largest US restaurant chain by revenue, has so far maintained its dominant position with four consecutive quarters of same-store sales growth.

“Traditional competitors are upgrading their menus and a new wave of experts is emerging and redefining taste and quality in chicken, beef and beverages,” McDonald’s CEO Chris Kempczinski wrote in a memo to the chain’s global system.

“There is no such thing as second place in a world where every restaurant is a swipe away,” he added.

To become the first choice for restaurant customers, McDonald’s plans to focus on menu innovation that improves taste and quality, such as improvements to its McCrispy chicken line. The chain has been trying to improve and expand its chicken offerings for years as competitors like Chick-fil-A steal customers away. Additionally, according to U.S. Department of Agriculture data, Americans have been eating more chicken than beef for the last 16 years due to health problems related to red meat consumption and high beef prices.

“We are raising the bar for our menu by improving quality and consistency at scale and innovating in areas where we see growth potential and know are important to our customers, like chicken, beef and beverages,” said Jill McDonald, the chain’s global chief restaurant experience officer.

The chain also wants to “co-create” with customers by listening more closely to what consumers want and how they interact with brands. Recent examples include the popularity of the viral Grimace milkshake and the collaboration with “A Minecraft Movie.”

The new restaurant design will give McDonald’s a recognizable look, but will also ease employee headaches and improve kitchen operations. The company said back-end systems, for example, will be more intuitive and connected.

McDonald’s is also testing automated order taking at five U.S. restaurants using a system it calls ARCHY to allow employees to focus on other tasks. More broadly, the chain also said it wanted “Redefining hospitality” by improving customer service and training employees to engage more with diners.

In September, the company will hold an investor day with more details on the strategy and related financial goals.