The McDonald’s app was downloaded 24 million times in 2021, by far the most in the quick-service industry, according to Apptopia, a real-time competitive intelligence company. The next-closest was Starbucks at 12 million. Although Kempczinski didn’t have exact numbers on how much loyalty mixes, he did note that app usage in the U.S. runs in the mid-single digits.
Loyalty programs are now in more than 40 markets globally, with the U.K. and Australia to come online in the first half of 2022.
“We’re well on our way to building the world’s largest loyalty program,” Kempczinski said.
Delivery has expanded to more than 33,000 restaurants in 100 countries, and in Q4, the channel witnessed double-digit comps growth year-over-year. McDonald’s signed long-term strategic partnerships with Uber Eats and DoorDash that will “unlock tremendous value for our customers and franchisees, helping to ensure the long-term profitable growth of delivery,” the CEO said.
Drive-thru sales continue to be higher than pre-COVID, but average service times slowed year-over-year due to staffing shortages. Kempczinski said one key will be opening more service channels to reduce pressure on the drive-thru. About 80 percent of dining rooms are open, and the expectation is that number will keep rising.
“Every market is laser-focused on opportunities that we can have to get back to continuing to make progress on reducing service times,” Kempczinski said. “The reason that that is so important is that when we reduce service times, we see customer satisfaction go up.”
For the full year, adjusted operating margin was 43.4 percent. In 2022, McDonald’s expects operating margin percent to be in the low-to-mid 40 percent range, as “strong topline momentum and minimal other operating income will be hampered by significant commodity and labor inflation,” Ozan said.
Food and paper costs increased 4 percent in the U.S. and 3.5 percent internationally last year, and the belief is that inflation will double. Most of the pressure will come in the first half of 2022 and ease as the year goes on.
As for labor pressures, only 1 percent of restaurants are operating with limited hours, an improvement from 10 percent in mid-December when Omicron began ravaging the country. Kempczinski said McDonald’s exited 2021 with a greater roster than what it started with.
Last spring, McDonald’s announced it was raising pay of hourly workers at company-run stores to an average of $13, but the chain doesn’t expect a one-time event of that magnitude again in 2022.
In light of these pressures, the company maintains that it's well-positioned with pricing compared to its competitive set.
“What helps us from a research standpoint is the way consumers view value and the perspective of value,” Ozan said. “And I think in 2022, that will continue to be really important as inflation is hitting customers potentially harder than it's hit people in a long time. And so we're very cognizant of making sure that our value proposition continues to be strong. And so we do look at kind of absolute pricing compared to just increases also.”