Chicken is a big area of focus for McDonald’s. | Photo courtesy of McDonald’s.
McDonald’s unveiled the next iteration of its business strategy on Monday, called McDonald’s Next, that is aiming to make the company a more consistent destination for a broader subset of consumers.
The strategy includes upgrades in its menu, its in-store technology and customer service. It will even show up in the design of the chain’s restaurants, as McDonald’s will start offering a new prototype for upcoming store remodels.
“We can’t ask our customers to choose,” McDonald’s CEO Chris Kempczinski said in a system message on Monday. “Hospitality or speed. Great taste or convenience. Value or quality.”
“They want what Ray (Kroc, McDonald’s founder) called the total of everything. They won’t trade one for another because they don’t have to. In a world where every restaurant is a swipe away, there is no such thing as second place.”
McDonald’s Next involves four main pillars: Menu, the consumer, the restaurant and people, or hospitality.
The company is looking to make some menu upgrades as it looks to compete more aggressively with specialists such as 7 Brew, Dave’s Hot Chicken or Five Guys. McDonald’s has already formed teams to develop products to compete with these chains, including beverages, beef and chicken.
McDonald’s already has upgraded its beverage offerings with a selection of Refreshers and dirty sodas while it plans energy drinks later this year. It has also upgraded the way it makes its burgers and offered the half-pound Big Arch.
But the company could make significant changes to the way it makes chicken. It has been testing hand-breaded chicken strips in Chicago and some other markets and appears intent on expanding a higher-quality chicken product. That could include tenders and other products, including sandwiches.
Some global markets, such as Malaysia, already serve hand-breaded chicken with success, giving McDonald’s executives confidence they can execute the product in more locations.
“Traditional competitors are upgrading their menus, and a new wave of specialists are emerging and redefining taste and quality across chicken, beef and beverages,” Kempczinski said in his message.
Another strategy focuses on marketing to the customer. McDonald’s plans to lean into influencer marketing to drive more attention on social media. The goal is to take more steps to let its customers interact with the brand.
McDonald’s invited social media influencers to its Worldwide convention being held in Las Vegas this week.
Then there is technology. McDonald’s is creating a new AI-based operating system for its restaurants called ArchIQ. Among its efforts: Testing drive-thru, voice-activated AI in five locations with Google. The company had previously tested drive-thru AI but ultimately abandoned the effort. The voice in the drive-thru is nicknamed Archy.
But the AI assistant is designed to make kitchen operations more efficient and eliminate unnecessary work inside the restaurants.
McDonald’s is also debuting a new redesign of its restaurants at the convention that is supposed to improve all these issues. The redesign is available to franchisees who have a remodel coming up.
Then there’s the hospitality piece. McDonald’s wants to make its stores friendlier, believing that better customer service inside the restaurants ultimately translates into better traffic, sales and cash flow for franchisees. The company is working to improve the way it trains workers to ensure better hospitality, while technology is supposed to free more of their time.
“As more of the customer journey becomes automated, there are fewer opportunities for guests to connect with crew,” Kempczinski said. “With fewer interactions, the bar for hospitality that makes people feel seen, welcomed, and valued only goes up. Customers also depend on us for compelling, predictable value, and even more so with unprecedented inflation.
“While perceptions of our value have rebounded in most markets, it’s a reminder that we need to earn, and re-earn, each and every visit.”
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Restaurant Business Editor-in-Chief Jonathan Maze is a longtime industry journalist who writes about restaurant finance, mergers and acquisitions and the economy, with a particular focus on quick-service restaurants.
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