McDonald’s Has A Huge Plan to Win Back Customers

Executives at McDonald’s have come up with a plan to turn around the fast food chain’s traffic problem.

According to the chain’s USA President Chris Kempczinski, the company has lost over 500 million customers to competition since 2012.

In an effort to win these customers back, McDonald’s will be making $1.7 billion of capital expenditures this year.

CEO Steve Easterbrook has said the company isn’t slowing down on working to revamp the menu and to improve their customers’ experiences.

Along with revamping its menu, the chain is focusing on store renovations and digital ordering and delivery.
This means self-service order kiosks and table service at some of its stores.

About 650 restaurants this year will have this experience.

“Through enhanced technology to elevate and modernize the customer experience, a focus on the quality and value of our food and redefined convenience through delivery, we have a bold vision for the future and the urgency to act on it,” said Easterbrook.

“We are moving with velocity to drive profitable growth and becoming an even better McDonald’s serving more customers delicious food each day around the world.”

By the end of this year, McDonald’s says it will franchise 4,000 restaurants bringing the global franchised percentage to around 93%. This would be a year ahead of schedule.

The company also saved more than $200 million in savings last year and continues to hit a goal of saving $500 million by the end of next year. By 2019, the chain wants to trim another 5 to 10 percent from its remaining cost base.
Other 2019 goals include:

Returning to in between $22 and $24 billion to shareholders in the three year period up until 2019.

System-wide sales growth of 3 percent to 5 percent.

Earnings per share growth in the high single digits.

Grow operating margin from the high 20 percent range to mid 40 percent range.

Raise the return on incremental invested capital target from the high-teens to the mid-20 percent range.

Disclaimer: We have no position in McDonald’s Corporation (NYSE: MCD) and have not been compensated for this article.