Shortly after reporting better-than-predicted Q3 financial results, McDonald's Corporation announced that it was embarking on a growth strategy — Accelerating the Arches — according to a news release. The promises include enhanced burger and chicken sandwiches as well as a plan for better community connection.

Specifically, the company said it will concentrate its efforts in three areas:

  • Maximize marketing by investing in new, culturally relevant approaches to communicate.
  • Tap into customer demand for the familiar, by focusing on its burgers, chicken and coffee.
  • Redouble its digital, delivery and drive-thru efforts to ease customer transactions.

"In countries around the world, we have seen customer behaviors change at an unprecedented pace over the last several months. We believe this presents an opportunity to do something special as we write the next great chapter of McDonald's," President and CEO Chris Kempczinski said in the release. "By embracing a bigger, more holistic vision for the future, Accelerating the Arches defines how McDonald's will deliver value to all stakeholders by providing a clear roadmap of what we can do for the millions of customers, in the thousands of communities, we serve each and every day. With our new growth strategy, we will build on our inherent strengths by harnessing our competitive advantages and investing in innovations that enable us to continue to offer fast, easy moments for our customers."

More specifically, the company said it will boost its investment in the communities it serves through ingredient sourcing, environmental action, assistance to those in need and improved opportunities for employees. It will do this through increased support for farming communities, as well as:

  • Moving toward a goal of 100% packaging by 2025 from renewable, recycle or certified sources.
  • Donating millions of pounds of supply chain and restaurant food to those in need.
  • Reducing barriers to employment for more than 2 million people worldwide.

In an effort to provide "clearer and more effective marketing," the chain has launched the "Serving Here," campaign to lustrate its community, customer, farmer, franchisee and supplier partner commitment, augmented by initiatives in its top markets, as well as a continuation of the Famous Orders promotion that initially brought customer celebrities Travis Scott and J Balvin. It will also continue to push affordability and introduce new packaging globally.

Toasted buns, better burger grilling plus crispy chicken

Under its commitment to core products, McDonald's is focusing on the Big Mac, Quarter Pounder, Chicken McNuggets and fries, which make up 70% of sales in top markets. It's improving its burgers by operational, process and formulation changes, including "new buns toasted to golden brown."

In the skyrocketing chicken category, McDonald's will invest in new line extensions and flavors for its nuggets and sandwiches, as well as culturally aligned flavor trends like its spicy McNuggets, as well as a new Crispy Chicken Sandwich in the U.S. early next year.

What about digital?

In digital sales, the company said mobile ordering is skyrocketing, with digital sales exceeding $10 billion this year across its top six markets. To build on the success, the chain will accelerate technology innovation through its new digital experience growth engine, "MyMcDonald's." The engine will present customers with tailored offers, a new loyalty program and what it said would be easier ordering regardless of delivery channels. "MyMcDonald's" starts in the coming weeks in the Phoenix area in the U.S. with a pilot of a new loyalty program.

To improve its increasingly important delivery business — which it said can serve 75% of the popular in its top markets who live within three miles of a store — McDonald's will make delivery available through its mobile app in more markets than the "several" worldwide it already includes.

Lastly, the company will maximize its drive-thru experience by testing new concepts and technology to make the customer experience even faster. This includes innovations to provide a faster, more convenient experience such as automated order-taking, express pick-up lanes for digital orders and a restaurant concept that offers drive thru, delivery and takeaway only.

Based on current conditions, the company expects its strong foundation and new growth strategy to deliver the following key metrics for 2021 and 2022:

  • Systemwide sales growth in the mid-single digits for 2021.
  • For 2022, unit expansion is expected to contribute 1.5% - 2% to systemwide sales growth.
  • Operating margin percent in the low-to-mid 40s.
  • Approximately $2.3 billion in capital expenditures, half for new unit expansion.
  • Free cash flow conversion greater than 90%.

"Our solid financial position and business foundation has been a source of strength through the pandemic," CFO Kevin Ozan said in the release. "We are confident that Accelerating the Arches builds on our momentum and will drive long-term profitable growth for all stakeholders."

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