‘Marketing muscle’ helps McDonald’s beat pre-pandemic sales
The fast food chain’s CEO says maximising marketing “in a culturally relevant way” and a focus on simplicity and customer needs has helped it drive growth despite Covid.
McDonald’s used its “marketing muscle to keep the golden arches shining brightly” during the past year of lockdowns and restrictions, according to president and CEO Chris Kempczinski.
The group’s performance in the first three months of the year surpassed the pre-pandemic period in the first quarter of 2019, with global comparable sales up by 7.5%. Total revenues for the period were $5.2bn (£3.7bn), for an operating income of $2.3bn (£1.7bn).
Strong US sales were the engine behind the Q1 growth, but markets including the UK, Australia and Canada also performed well. European countries including France and Germany saw a weaker performance and areas such as Spain, which relies on tourism, faced a tough year.
Speaking at the presentation of the company’s results for the first quarter of 2021, Kempczinski said the fast food brand had focused on simplicity and customer needs to help it weather the difficulties of the last year. A reduced menu introduced during lockdown periods saw faster service, shorter queues and higher margins, he said.
“Our teams around the world are focused on executing our Accelerating the Arches strategy at the highest level. We’re maximising our marketing in a culturally relevant way, committed to the great tasting customer favourites on our core menu and doubling-down on digital, delivery and drive-thru to create a faster and easier customer experience,” said Kempczinski.
Accelerating the Arches is the McDonald’s growth strategy, introduced in 2020, that sets out its purpose and objectives.
“Through the pandemic we’ve seen the power of the McDonald’s system, and our franchised model, at work,” said Kempczinksi. “It’s hard to imagine how we would have adapted to the constantly changing circumstances of the past year if we were not a locally-owned, locally-managed system,” he said.
“We leaned into our historical strengths… creating feel good moments that were more welcome and needed than ever. At the same time we kept innovating to offer customers new ways to connect with our brand. And we used our marketing muscle to keep the golden arches shining brightly, reminding people of their enduring trust in our brand and our purpose to feed and foster communities.”
The last year saw rapid growth in the three Ds of digital, delivery and drive-thru. The brand entered lockdown with 3,000 of its 39,000 restaurants offering delivery. That figure now stands at 30,000, or 75% of its branch network.
Connecting to its customers digitally has also been profitable for McDonald’s. There are now 40 million users of the McDonald’s app in its six most popular markets.
A new loyalty scheme is also being tested in the US and Germany, with a view to further roll out.