The new US President of McDonald’s, Chris Kempczinski, speaks during a press conference in New York on November 17, 2016.
Shannon Stapleton | Reuters
McDonald’s said Monday it expects mid-single-digit sales growth in 2021 and 2022 as the fast food giant plans its recovery from the coronavirus pandemic.
The strategy to increase sales growth includes more collaborations with celebrities, adding more chicken to the menu, and piloting a loyalty program in the US.
The company told investors that it expects annual investments of $ 2.3 billion, about half of which will be used to build new restaurants. New locations will add approximately 20% to 2% to McDonald’s system-wide revenue growth in 2022.
Still, the company reminded investors of the ongoing uncertainty resulting from the coronavirus crisis. It said it would continue to evaluate its financial expectations and provide updates when warranted.
On the previous Monday, the company published its third quarter results, beating analysts’ estimates for both earnings and sales. McDonald’s U.S. business saw a return in sales in the same store for the quarter, fueled by popular promotions like the deal with rapper Travis Scott’s favorite order and the limited-time spicy McNuggets.
McDonald’s shares recently gained nearly 4% in premarket trading. With a market cap of nearly $ 167 billion, the stock is up nearly 10% year-to-date.
As the coronavirus pandemic has rattled both the McDonald’s business and the wider restaurant industry, the company is taking note of how consumer behavior has changed. The new strategy, unveiled to investors on Monday, doubles such trends as customer preference for core menu items and the surge in drive-thru orders.
With expected digital sales of over $ 10 billion this year, the company plans to launch “MyMcDonald’s” in its top six markets by the end of next year. The new platform will bring together McDonald’s various technical investments such as the app and the digital menu boards and make it easier for customers to order and pay for their food. McDonald’s will be testing a loyalty program in the Phoenix area as part of the plan.
The company plans to leverage the strength of its drive-through lanes by testing automated order taking, digital order-only drive-through lanes, and a restaurant design with no food indoors. McDonald’s also said the “vast majority” of new restaurants in the US and the International Operated Markets segment, which includes France and United Kingdowm, will have drive-through lanes.
The pandemic has also pushed McDonald’s customers to return to their classic menu items like the Big Mac or McNuggets. The company stated that its main menu items account for about 70% of its sales. There are plans to make improvements to improve the taste of the burgers, e.g. B. toasting the buns until golden brown and changing the way they are grilled.
But chicken grows faster than beef. In response, McDonald’s plans to expand its range of chicken, including the long-awaited introduction of its crispy chicken sandwich in the US early next year. The sandwich is supposed to compete with those of Chick-fil-A and Popeyes.
McDonald’s strategy also includes staying relevant to consumers. His famous commissioned actions, like those with Scott and reggaeton singer J. Balvin, are “just the beginning”.
The chain plans to launch new packaging around the world and run an advertising campaign that will focus on its values and commitments to employees, suppliers and franchisees.
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Program Notice: For more information on McDonald’s, please contact CEO Chris Kempczinski in Squawk on the Street on Tuesday at 10am CET.