McDonald’s has credited its tie-up with Pokémon Go for boosting sales in Japan and says it forms part of its strategy to “talk to leadership partners”.
McDonald’s was the first brand to advertise on Pokémon Go, paying to see 3,000 of its fast-food restaurants in Japan become ‘Pokémon gyms’ in the virtual reality game. Players must visit these locations to progress in the game by becoming the gym’s champion.
And speaking on an investor call today (26 July), CEO Steve Easterbrook admitted the deal has been good for business.
“Our relationship with [game developer] Niantic is driven by the Japanese team. It is a global phenomenon, clearly, and we always want to talk to leadership partners around the world.
“We are enjoying what [Pokémon Go] is doing for our business at the moment.”
Steve Easterbrook, CEO, McDonalds
His comments come as McDonald’s revealed its turnaround strategy remains “on track”, with global sales up 3.1% in the second quarter. Sales at its ‘international lead’ division, which includes the UK, increased by 2.6% with operating income up 4%.
McDonald’s saw “all time monthly highs” in guest counts and average order value in the UK in April and May as a marketing focus on quality and sustainability and investment in new store formats and technology paid off.
Easterbrook claimed McDonald’s is gaining market share in the UK through a “commitment to running great restaurants” as well as a focus on initiatives that “create customer excitement” such as new menu propositions, promotions and store formats.
He cautioned that while Brexit had created “uncertainty” in the UK and Europe, he is “confident” in McDonald’s ability to “manage through the change” and said the company has so far seen “no significant change” in consumer demand
“We have a long track record of success in the UK and in the second quarter compelling promotions plus the performance of our ‘experience the future’ restaurants led to growth in average cheque and guest counts, breaking our all time monthly highs in April and May,” he added.
Brand perception boost
While McDonald’s has performed well in the UK, it has struggled globally and particularly in its home market of the US where rival fast food brands such as Chipotle and a shift in consumer habits have dented sales and the brand’s reputation.
However, Easterbrook claimed that initiatives aimed at improving brand perception are paying off, citing recent YouGov data that showed McDonald’s was the fourth most improved across all brands and the most improved in the fast food brand in the US. He also claimed customer satisfaction is up by 6% due to improvements in order accuracy, quality food perception, friendliness and speed of service.
“We are seeing encouraging progress because while we are driving the business in the immediate term we are also making investments in and communicating on food quality, sustainability and our employment proposition,” he said. “And the day-to-day customer experience enhances the brand and immediate satisfaction.
“With a brand like McDonald’s, everything we do communicates so if we can improve on every consumer touchpoint we will see a broader halo on the brand.”
He said the success seen so far means McDonald’s will continue to focus on food quality with plans for a renewed push in the US. It will also be bringing its ‘experience of the future’ formats to the US. These aim to “take out interactions that don’t add value”, for example by introducing self-order kiosks or mobile ordering.
“[With experience of the future] we know we are onto something. Customers respond well and it breathes new life into our restaurant and our brands,” Easterbrook explained.