McDonald’s Focuses on Operations

The company is looking to increase service speed and boost traffic.

March 21, 2019

CHICAGO – McDonald’s Corp. had a busy 2018, with delivery and curbside service, remodeling U.S. units, adding fresh beef to its burgers and developing a new value menu. But all of that work resulted in a 2.2% drop in traffic, Restaurant Business reports. This year, the fast-food chain will be working on how to reverse that trend with an eye on operations.

“One of the things you’ll see in 2019 is a big focus on what we call just running better restaurants,” said Kevin Ozan, CFO, during the recent J.P. Morgan Gaming, Lodging, Restaurant & Leisure Management Access Forum. One example is working on faster service, especially at the drive-thru. McDonald’s officials have known for years that slow drive-thru waits have exacerbated its customer traffic troubles.

“If you think about what we’ve done over the past several years—introduced all-day breakfast, put in fresh beef, put in some premium products like the signature-crafted sandwiches that take a little bit longer to make—some of the complexity we’ve added into the business has now created slower drive-thru times,” he said.

For McDonald’s, the drive-thru component is essential to its core business. In fact, the drive-thru generates more than two-thirds of sales. “We have a collective resolve that service times” should get better, said Steve Easterbrook, CEO. “We will not accept them getting any longer.”

Drive-thru service time remained flat last year, but McDonald’s wants to speed it up through digital menu screens and outdoor digital menu boards. The chain also will work on more staffing in the drive-thru area.

Ozan pointed out that the company’s same-store sales increased 2.5% in 2018; however, that was because the chain raised menu prices.