Marketing is “starting to show up” as a driver of growth for McDonald’s, CEO Chris Kempczinski has said, as the business credited “successful” marketing promotions with bumping up sales over the third quarter of 2022.
Speaking to investors today (27 October) as the firm reported its Q3 financial results, Kempczinski said marketing is acting as “an important growth driver” for the fast food giant by making the brand “more relevant” and “more recognisable” to its customers.
The company reported a 9.5% rise in global sales year-on-year and a profit of $2.68 (£2.31) per share, beating analyst estimates of $2.58 (£2.23).
“If you’re having to look with a microscope to see the impact of marketing on your P&L, it’s not big enough,” Kempczinski said, adding that, by this measure, McDonald’s is “very confident” that its marketing approach is paying off.
“I can confidently say the McDonald’s marketing team is firing on all cylinders,” he said.
Even as UK customers grapple with the cost of living and energy impacts, our customers are coming back to McDonald’s because of the value we offer.
Chris Kempczinski, McDonald’s
McDonald’s brand is “part of culture”, he explained, claiming that in recent years the marketing team has been making more of this status and tapping into it.
He gave examples including the ‘McRib Farewell Tour’, which will see the sandwich return to restaurants for an apparent last time, and an adult Happy Meal in the US, which comes with a nostalgic toy. The success of these initiatives is evident in the buzz they generated on social media, while the adult Happy Meals sold out within days, he said.
UK digital growth
McDonald’s generated almost $7bn (£6bn) in sales through digital channels in its top six markets in the third quarter, which represents more than a third of total sales in those markets.
Crucial to accelerating that digital engagement is the My McDonald’s loyalty scheme. The loyalty scheme is now available in all six of the business’s top markets, including the UK, where it launched in July this year.
According to chief financial officer Ian Borden, the UK scheme has grown to over 3 million active members within its first three months.
“The UK built on the successful roll-out, driving adoption with exclusive app offers through the quarter,” he said. He gave the example of September’s “innovative” Monopoly initiative, which allowed customers to virtually peel their stickers in the app.McDonald’s rolls out loyalty scheme across the UK
Kempczinski reiterated that McDonald’s is “exceeding expectations” with its loyalty programme, stating that each preference stated and each reward given in the app helps the business to understand its customers better, and fuel content and offers accordingly.
He added that delivery “remains a key driver of our business”. For added convenience, customers will now be able to earn loyalty points and order for delivery within the McDonald’s app, something which is already available to customers in the UK.
He claimed that McDonald’s core focus is delivering for customers, adding that it can do so even in the markets worst hit by inflation, including the UK.
“Even as UK customers grapple with the cost of living and energy impacts, our customers are coming back to McDonald’s because of the value we offer,” Kempczinski said.