McDonald’s made some significant progress on those platforms in Q2, with Easterbook calling the brand’s rapid evolution to “Experience of the Future,” stores “quite remarkable.” McDonald’s converted 1,300 restaurants to the design, known for its kiosks, in a 90-day Q2 stretch. That measures to roughly 10 additional restaurants every day. To date, McDonald’s has more than 5,000 updated units, north of one-third of its U.S. footprint.
“When it's a full modernization [Experience of the Future] here in the U.S., we're getting mid-single digit sales uplifts,” Easterbrook said. “When it's just adding the EOTF elements on modernized restaurant, we're still getting 1 to 2 percent uplift.”
On the delivery front, Easterbrook said the chain is “moving at a pace that is unprecedented in the McDonald’s system.”
Flip the calendar back to last July and McDonald’s offered delivery in about 7,800 restaurants. Today, there are 13,000-plus units across 60 markets on six continents offering the service. In some top markets, delivery is representing as much as 10 percent of sales, Easterbrook said.
“Delivery requires virtually no additional investment and is tremendously effective in bringing profitable and incremental guest count. We're continuing to see delivery orders of about double the size of the standard restaurant average check,” he said.
The key centers on driving awareness. When McDonald’s held its McDelivery Day this July, the brand saw its highest number of delivery transactions ever in a single day stateside.
Another evolving McDonald’s initiative is the fresh beef Quarter Pounders. Easterbook said awareness levels at launch were around 80 percent, and McDonald’s has been able to take share thanks to solid consumer sentiment. However, it has introduced operational challenges. It’s added a few seconds to service time, a pronounced issue in the drive thru. “We're looking at other things we can do to simplify the operation to help bring our service times down,” Easterbook said.
McDonald’s addressed its recent food-safety salad issues. The company had to find a new supplier at roughly 3,000 Midwest restaurants due to a cyclospora outbreak health officials tied to McDonald’s. Federal officials pegged the number of affected people at 286 in 15 states who fell ill from McDonald’s. Eleven were hospitalized, according to the Food and Drug Administration. The locations all received new salad ingredients earlier this week.
“Food safety and the customer's well-being is our absolute No. 1 priority, first and foremost,” Easterbrook said. “… It's something you don't want to be associated with, so we take it very seriously."
McDonald’s breakfast business, which has been a topic of discussion in recent calls and represents about 25 percent of sales, is something the brand remains active in fixing. It’s not a product concern as much as a daypart one. Easterbrook said McDonald’s believes it can regain share through local market activity.
“The tastes and wants of consumers around the U.S. are pretty vastly different at that breakfast daypart,” he said. “Some are: coffee-led markets that are food supported; others, food-led markets that are beverage supported. So we believe putting the power back into the local co-ops is the right way to go.”
“We have taken share on the sales level for 72 of the last 78 weeks in the U.S. and that's a trend we expect to continue. We want to get the traffic share back as well. So we want to be greedy. We plan to be greedy and win on both sales and guest count and that's where we're galvanizing ourselves around.”