McDonald’s Corp. is betting on everything from fancier chicken to new playgrounds as part of a campaign to make fast food feel less like fast food.
New menu items including hand-breaded wings and filets are in testing as part of a wide-ranging wager on higher-quality food. This, along with more engaging social media campaigns and upgrades to restaurants, should help McDonald’s cement itself as more diners’ first choice — not just for a quick meal on the go, but also for family outings and other occasions.
McDonald’s will still focus on value and speed, but customers are “really demanding more for their money,” Chief Executive Officer Chris Kempczinski said. They’ve raised their expectations as competitors upgrade their menus and offer new options in fast-growing categories such as chicken, beef and beverages. This is raising the bar for McDonald’s, especially as inflation quickens and consumer sentiment weakens.
People are also reading…
“It’s just that much more important to have an even better experience these days,” Kempczinski said. McDonald’s was expected to unveil its vision at a global convention this week for franchisees, with whom it’ll work out the details.
A sign is posted in front of a McDonald's restaurant on April 28, 2022, in San Leandro, Calif.
McDonald’s shares fell 1.1% on Monday in New York trading. The stock has declined about 10% this year, trailing the 11% gain in the S&P 500 Index.
McDonald’s U.S. sales have outpaced the fast-food industry’s growth for four straight quarters, according to restaurant research firm Technomic, powered by attention-grabbing campaigns such as a Minecraft-themed meal and a value menu that has appealed to price-sensitive diners. It’s looking to keep up that momentum.
But there’s a downside to McDonald’s consistency and predictability: “Very little tends to stand out about any one visit or order,” said Robert Byrne, senior director at Technomic.
With franchisees asking how McDonald’s can further differentiate itself, executives spent about six months plotting the answer: a strategy they’re calling “Next.” A key step is improving the food lineup, including with tests of new chicken items to compete with chains like Raising Cane’s, whose menu revolves around chicken fingers. McDonald’s is experimenting with hand-breaded chicken, including a new filet for its Deluxe McCrispy sandwich.
New colorful iced drinks will compete with the likes of Dutch Bros Inc., a rising star in beverages. McDonald’s is also tightening its coffee standards, and looking at offering non-dairy milks that have become standard across the industry.
The other priority is improving consistency and attention to detail across its more than 45,000 restaurants around the world. McDonald’s is reviewing its training for general managers and crew while giving them more opportunities to try food that’s prepared exactly by the book, according to Tiffanie Boyd, the company’s global chief people officer.
“Leaving a hamburger on the grill for 30 extra seconds — it may not feel like much, but once you can taste that difference, people will be much more motivated to deliver according to our expectations,” Boyd said.
Layout changes
Over the past decade or so, McDonald’s has renovated its restaurants to make them sleeker and more modern. In the process, it has largely removed playful colors and mascots, sparking criticism that locations felt gray and generic. The company is now looking at “injecting some of the playfulness” back while making layouts airier and more open, according to Jill McDonald, the company’s chief restaurant experience officer.
Options include larger drive-thru windows and refreshing the design of its playgrounds. Locations could also feature updated break rooms for staff, an updated layout for the McCafé beverage section of the restaurant and a more consistent design across the world, according to McDonald’s.
The company also needs to eke out more productivity from each location as franchisees face rising fuel, labor and food costs.
“The inflation issues that they’re facing are real. The geopolitical issues that they’re facing are real,” Kempczinski said. “We’ve got to find ways to make our restaurants work better, work more efficiently.”
McDonald’s sees automation as part of the solution. The company has been working with Google to develop AI-powered order-taking for its drive-thrus.
At the same time, the bar for hospitality is getting higher, according to Kempczinski, so McDonald’s wants to ensure customers get friendly service on each visit. This could include, for example, coaching workers on always greeting diners.
McDonald’s also wants to give customers more reasons to post online. That could include partnering with YouTubers with large followings to launch marketing campaigns, instead of waiting for the chain's launches to go viral, according to Kempczinski.
“There’s always risk when you put your brand out for other people to create with and play with. The reality is it’s happening with or without us,” said Morgan Flatley, the company’s global chief marketing officer. “I think we need to lean into it because it’s going to happen anyway.”
