Comparable revenues fell 3.3 per cent in the quarter, a drop that chief executive Don Thompson described as “disappointing”. Profit was down 30 per cent as it faced a number of setbacks including the closure of restaurants in Russia, a scandal over meat supply in China and increased competition in its biggest market, the US.
Thompson, speaking on a conference call following the results, admitting that McDonald’s has not changed at the same rate as customers’ eating out expectations or their expectations of McDonald’s. Key to future success, he suggested, is the ability to deliver a “more relevant” McDonald’s experience that enhances convenience and gives customers more choice.
The McDonald’s experience of the future
This, said Thompson, means that the McDonald’s experience will need to be slightly different in each market to take advantage of local preferences. It has introduced a “Create your taste” concept in one store in Australia that was developed at its learning lab in the US.
The service allows customers to make their order via a digital kiosk and choose factors such as what their bun is made from, the size of the burger and extra ingredients such as cheese, bacon or salad. McDonald’s staff then serve the burger to customers once they have sat down.
Thompson said this is one example of how McDonald’s is trying to offer wider choice to broaden its appeal. It is also introducing table service in other countries, such as France, and has integrated Apple’s new payment technology Apple Pay in 14,000 US restaurants, including drive-thrus.
While most of these services are still in trial in various markets, a global activation plan will be announced in January.
“We want to deliver new dining experiences that complement a modern restaurant. All of these concepts will create the McDonald’s experience of the future,” he added.
Engaging in more transparent dialogue
In the US, where McDonald’s brand has been particularly badly hit, Thompson said the fast food company has listened to customers’ complaints about excessive waiting times. It will now simplify its menus to highlight customer favourites and then give local markets the opportunity to choose any extras they want to sell based on local preferences – these could include mozzarella sticks or chorizo burgers.
“There are a lot of misconceptions out there about our food and we want to provide an opportunity to answer those questions to better build the brand and tell the truth about our supply chain.”
McDonald’s also wants to engage in a more “transparent dialogue” with customers and consumers in general and earlier this month debuted its “Our food your questions” campaign. This, said Thompson, build on the success of a similar approach in the UK which actively invited customers to join the conversation and talk to McDonald’s about issues such as sourcing, food integrity and social responsibility.
It will also build a “stronger balance” between regional and national marketing, linking brand building initiatives with local product campaigns.
“We want to engage in a dialogue. There are a lot of misconceptions out there about our food and we want to provide an opportunity to answer those questions to better build the brand and tell the truth about our supply chain,” said Thompson.