McDonald's Adapts to Sales Challenges with Improved Strategy
McDonald's, the world's largest fast-food chain, has experienced a global sales decline for the first time in nearly four years.
The company attributed this drop to a decrease in US customers, partially offset by price increases, alongside the "continued impact of the war in the Middle East" and reduced demand in China.
However, McDonald's is one company amongst the rest of the world facing challenging times in the food industry, amongst changing consumer preferences, increased competition and the rise of food delivery services such as Uber Eats and DoorDash.
Yet despite these hurdles, McDonald's continues to innovate and adapt its sales strategies to maintain its market position.
McDonald’s sales strategy
From 1940 starting as a single restaurant in San Bernardino in California, McDonald's now has over 39,000 locations in more than 100 countries; and is adapting further.
Digital transformation
McDonald’s has embraced digital technology to enhance customer experience and boost sales.
Investing heavily in self-ordering kiosks, mobile apps and digital menu boards, these innovations aim to reduce wait times and improve order accuracy, addressing key customer pain points.
Delivery partnerships
In response to the growing popularity of food delivery services, McDonald's has partnered with major takeaway and delivery platforms, like Uber Eats, DoorDash and Just Eat to expand beyond its physical locations.
The company’s McDelivery channel, launched in 2017, has also grown significantly, now operating in over 32,000 restaurants across 100 countries.
By leveraging the technology and logistics capabilities of these delivery giants, McDonald's can maintain control over the customer journey and customise promotions more effectively.
Menu innovation
To appeal to changing consumer tastes and health-conscious diners, McDonald's has introduced new menu items and modified existing ones.
The company has added more salads, wraps and plant-based options to cater to vegetarian and vegan customers.
In the UK, McDonald's has also partnered with Beyond Meat to offer the McPlant burger, while in the US, it has tested the P.L.T. (Plant, Lettuce, Tomato) burger.
Health-conscious offerings
McDonald's has also focused on improving the quality of its ingredients.
The company has committed to sourcing sustainable beef and using cage-free eggs in its products.
Moreover, McDonald's has announced a strategic partnership with Google Cloud to integrate generative AI solutions across its restaurants worldwide.
This collaboration is expected to accelerate automation, reduce complexity for crew members and enhance customer experiences.
McDonald’s market context and competitive landscape
As the fast-food market is highly competitive, major players like Burger King, Wendy's and KFC are constantly vying for market share.
To stay competitive and combat the global market challenges from changing consumer preferences, to increase in health consciousness, to rising costs, McDonald's has implemented initiatives to address evolving consumer preferences for convenience and digital interaction.
Its "Accelerating the Arches" strategy focuses on maximising marketing, enhancing core menu items and expanding digital, delivery, drive-thru and development capabilities.
Meanwhile, the MyMcDonald's programme aims to boost customer engagement through personalised offers and a loyalty scheme, targeting 250 million active members by 2027.
Chris Kempczinski, McDonald's President and CEO, stated to McKinsey, the global management consulting firm in light of McDonald's sales challenges: "We're doubling down on our digital, delivery and drive-thru channels to meet our customers where they are and provide them with a seamless McDonald's experience."
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