McDonald's strategy for improving food: toast the buns longer
[NEW YORK] McDonald's Corp is toasting its sandwich buns longer and changing how it sears and grills hamburgers, part of an effort to reinvigorate growth with "hot, tasty food." The increased toasting time makes the sandwiches hotter, while the new grilling technique produces juicier burgers, Steve Easterbrook, the restaurant chain's chief executive officer, said at an investment conference in New York on Wednesday.
"These little things add up to big differences for our customers," Mr Easterbrook said. "We're recommitting to tastier food across the menu."
Mr Easterbrook, who took the CEO job in March, is trying to pull the company out of a prolonged slump. Global sales fell in 2014 for the first time in more than a decade, while the US has posted declines for six straight quarters. Earlier this month, Mr Easterbrook laid out a turnaround strategy that included cost cuts, a leadership reorganisation and a plan to sell about 3,500 company-owned restaurants across the globe to franchisees.
But that plan didn't focus on the details of the food, something Mr Easterbrook sought to address on Wednesday. He also said McDonald's would stop providing monthly sales figures, an effort to nudge investors away from short-term results.
Mr Easterbrook sees turning around the US business as a "burning priority," saying that an emphasis on convenience and value will bring customers back to McDonald's in its home market. As part of the push, it's testing a slimmed-down menu for drive-thru customers, offering about half as many items as usual. Drive-thru orders account for about 70 per cent of US sales, so improving that experience is crucial for McDonald's.
The fast-food chain has lost its place as a leader in customer convenience, Mr Easterbrook said. Instead, companies like Amazon.com Inc. and Uber Technologies Inc. are on the forefront, reframing expectations for US consumers, he said.
"I'm not saying we've gone backwards in what we're doing, but we need to keep evolving our proposition to the customers," he said.
In recent months, McDonald's has debuted "artisan" chicken and a new premium sirloin burger. The company is now looking at other potential changes that would improve food quality, while keeping a close eye on costs, Mr Easterbrook said.
"The vast majority of the population lives paycheck to paycheck in all our markets around the world," he said. "If we can bring some of the aspirational quality to them without making a premium price, that's where we hit the sweet spot."
BLOOMBERG
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