McDonald’s Corp. will attempt to overcome persistent headwinds and grow its market share in the United States in 2014 with new initiatives focused on customization and speed of service.
McDonald’s confirmed the test of “build-your-own” burgers in Southern California and plans for a third drive-thru window in forthcoming rebuilt or newly built restaurants. Both tests speak to McDonald’s publicly stated plans to expand menu offerings and improve speed of service through the adoption of its “high-density” kitchen equipment, which brand officials focused on during Thursday’s biennial Investor Day meeting in Oak Brook, Ill.
Kevin Newell, McDonald’s chief brand and strategy officer for the United States, said the high-density prep tables, which can hold dozens of fresh sandwich ingredients and are meant to improve kitchen efficiency, would be in place at McDonald’s 14,000-plus U.S. locations by next year.
“We’re ensuring that our kitchens are ready to deliver,” Newell said during the Investor Day meeting. “These tables will allow us to do two very important things: offer greater customization by accommodating more ingredients, and improve overall speed of service by improving the overall design and efficiency of the prep table.”
McDonald’s USA president Jeff Stratton noted during the same presentation that McDonald’s would reduce its number of remodels in the United States to 300 next year, allowing the company and its franchisees to prioritize the rollout of high-density kitchen equipment above all.
Jim Johannesen, the chief operating officer of McDonald’s USA, added that the new prep tables would give McDonald’s “an immediate ability to satisfy our customers in a greater way than we currently are.” The focus on kitchen upgrades also would be the more prudent use of franchisees’ cash flow, which decreased slightly in 2013, he said.
“Our owner-operators know this is a break in the action, a slight pause, and then in 2015 we’ll be right back into [reimaging],” Johannesen said. “Because the demand is there, people see that this hits on all cylinders for the customer. We are trying to be respectful of the pace of reinvestments that our operators make.”
Dennis Lombardi, executive vice president of Columbus, Ohio-based WD Partners, said the focus on throughput — seemingly at the expense of further remodeling — makes sense for McDonald’s, which is “the best of the large, mature chains in the quality of its stores and being current in style and amenities.”
“They have got to the point where they can easily afford the breather to slow that down and focus on the back-of-the-house,” he said. “It’s all part of a logical strategy to drive more sales, and thus more profits, through existing restaurants and existing customers.”
A look at tests for 2014
(Continued from page 1)
According to a report in the Orange County Register, McDonald’s began a test this week in Laguna Niguel, Calif., of a customizable quarter-pound cheeseburger, in which 20 different burger toppings can be selected from an iPad menu. Toppings included more upscale ingredients like guacamole, grilled mushrooms or creamy garlic sauce, the report said.
McDonald’s spokeswoman Lisa McComb added that the platform was tested last month in Romeoville, Ill.
“It is too soon to tell whether these concepts or something similar would be rolled out nationally,” she wrote in an email. “These tests represent just one aspect of our broader menu innovation journey.”
Lombardi said a test of customizable burgers would be in keeping with consumers’ demands for more control over ingredients and preferences for freshness, which have fueled the “better burger” trend in fast casual for several years. It is too early to say whether it is a bridge too far operationally for McDonald’s, Lombardi said, but he expressed confidence that the chain knows when to end a test that does not work for the operators or the unit-level economics.
“If you remember, a number of years ago, they tried sub sandwiches, which created such a slowdown that McDonald’s quickly pulled out of the test,” he said. “One thing McDonald’s does well is not only test things that are evolutionary but also some things that are more out-of-the-box. And when they test something out of the box, they’re willing to end it quickly, which keeps them fresh.”
Separately, McDonald’s said it would add the “Fast Forward Drive-Thru” feature to new and rebuilt restaurants next year, adding a third drive-thru window to where customers could pull their cars if they needed to wait a little longer for a particular menu item. A third window could potentially accommodate orders of premium items with longer preparation times like Premium McWraps or the recent Mighty Wings limited-time offer.
Lombardi said the drive-thru modification is also a reasonable initiative for McDonald’s, which derives a majority of its sales at the drive-thru window.
“Given the way more consumers are willing to wait up to six minutes just to get to the drive-thru’s order board, as opposed to going into the restaurant, it makes all the sense in the world,” Lombardi said. “Look at how well they do at breakfast, a time-precious and stay-in-my-car occasion for the consumer. Anything McDonald’s can do to make the drive-thru more convenient should work.”
Strengthening NFL partnership
A separate report in Advertising Age said McDonald’s had partnered with the National Football League to offer “NFL Rush Zone” Happy Meals. The children’s meals would include collectible toys based on the Nickelodeon show “NFL Rush Zone: Season of the Guardians,” as well as 32 different “Rusher” action figurines representing each of the NFL’s professional teams.
McDonald’s and the NFL have forged a bigger marketing partnership this year, as the chain will be the official sponsor of the league’s Pro Bowl for the second straight year and also featured quarterbacks Joe Flacco of the Baltimore Ravens and Colin Kaepernick of the San Francisco 49ers in the most recent campaign for Mighty Wings.
“McDonald’s has worked with local NFL teams for decades, and we are proud of our multiyear partnership with the NFL as the official restaurant sponsor,” McComb wrote. “The Rush Zone Happy Meal allows our youngest customers to get into the action.”
Oak Brook-based McDonald’s operates or franchises nearly 35,000 restaurants in more than 100 countries.
Contact Mark Brandau at email@example.com.
Follow him on Twitter: @Mark_from_NRN