McDonald’s to Boost Recovery with Significant Marketing Investment

    The fast-food chain is also increasing safety standards for when dining rooms reopen.

    Exterior of a McDonald's restaurant.
    McDonald's
    McDonald’s reported in late April that 99 percent of domestic stores and 45 percent of the International Operated Market were in operation.

    McDonald’s announced Wednesday that it is implementing initiatives to accelerate franchise recovery and enforcing new safety guidelines in preparation of dining rooms reopening across the country.

    The company will spend one month’s worth of marketing support across the U.S. and International Operated Market segments (i.e. Australia, Canada, U.K., France). The amount will vary by market, but will represent about 4 percent of pre-COVID systemwide sales. McDonald's reported $100.2 billion in total systemwide sales in fiscal 2019. The company’s U.S. business collected $40.4 billion in systemwide sales last year, according to FoodserviceResults. (Here's a deeper look at McDonald's 2019 financials).

    “The overall objective is to accelerate recovery, return to growth, and maintain the competitive advantage that has played such an important part in McDonald’s success,” CEO Chris Kempczinski said in a video.

    Kempczinski said McDonald’s is also working with local financial teams to conduct an “organization by organization” assessment in the next few months to funnel support to the hardest hit parts of the system.

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    The third objective focuses on stores with unique circumstances, like providing financial assistance to delivery-only restaurants.

    “These initiatives, alongside others we’ve taken to manage through this crisis, are the result of our collective focus on maximizing our financial flexibility to match our resources to the immediate needs of the system,” Kempciznski said. “Above all, this program is designed to fuel growth and support those hardest hit.”

    The brand has sought to assist franchises—including rent deferrals—since dining rooms were forced to close in March.

    McDonald’s reported in late April that 99 percent of domestic stores and 45 percent of the International Operated Market were in operation. Many stores are operating via drive-thru, delivery, and carryout.

    In addition to financial support, the brand is also enforcing new standards for dining rooms as states begin to lift mandates. These will cover operations across all 14,000 U.S. McDonald’s locations.

    Those new guidelines include closing some seating to accommodate social distancing, increasing the frequency of cleaning high-touch surfaces, continuing to mandate that employees wear masks and gloves and providing masks to customers where it’s required, and keeping Play Places closed and modifying the dine-in beverage procedure to minimize contact.

    If customers are dining in, food will be delivered to the table in a double-folded bag. Restaurants may post signage to let customers know which tables have been cleaned.

    The new requirements come after McDonald’s implemented nearly 50 process changes in its restaurants, like providing hand sanitizer to customers, placing social distancing decals inside stores, closing the soda fountain, and installing protective panels at the front counter.

    “With adherence to these new procedures and guidance, as well as continuing to rely on guidance from CDC, state and local authorities, McDonald’s, in partnership with Owner/Operators will make reopening decisions that are right for the local communities and help ensure restaurant crew and customers feel safe and welcome,” Joe Erlinger, president of McDonald’s USA, said in a statement.

    “As our daily routines continue to evolve, we remain committed to safely serving you and our local neighborhoods around the country,” he continued. “We look forward to welcoming you back into our dining rooms, when the timing is right and with these extra precautions in place.”

    The brand’s global same-store sales dropped 3.4 percent in Q1 while U.S. stores experienced growth of 0.1 percent. McDonald’s ended Q1 with more than $5 billion in cash on the balance sheet.