Earlier this week, McDonald’s revealed its plans for attracting new customers to its restaurants. The company is set to turn around its client numbers as it reported the loss of “hundreds of millions”.
McDonald’s is one the largest restaurant chain companies in the world. Also known as McD, it is a hamburger and fast food restaurants chain. Since it was opened back in 1940, the company expanded on a global level.
Its restaurants can be found in 119 countries and include over 36,600 outlets. Estimates show that McDonald’s serves about 68 million customers on a daily basis. But its client number has reportedly been falling.
This is according to the company itself. As such, on March 1st, McDonald’s revealed its plans for attracting new clients. This will include various methods and will target more than just one sales area.
Chris Kempczinkski, the McDonald’s USA President, offered details. According to him, since 2012, the company lost over 500 million clients. Most such visits were reportedly lost as the customers favored McD’s close competitors.
As such, McDonald’s is planning on attracting new clients. It will be trying to do so by using an estimated $1.7 billion in capital expenditures. The sum will be utilized throughout the year. It will be used in both new are existing projects. Currently underway programs will benefit from the funding as they may also receive new steps.
A more detailed expenditures plan was presented on March 1st, in Chicago. The company is already hard at work in attracting new customers. Over these past few months, it has been working on revamping its products menu.
McDonald’s has also been trying to improve its clients’ restaurant experience. According to Steve Easterbrook, these efforts will “not be slowing down”. Easterbrook is the McDonald’s CEO.
He stated that the company has “a bold vision for the future”. It also has the “urgency to act on it”. Easterbrook stated that McD will start using an enhanced technology so as to modernize and elevate the customer experience. Its restaurants will also be focusing on ensuring the value and quality of its food.
McD will also try to ‘redefine convenience’ with help from a delivery system. The company is looking to attract new clients and to drive profitable growth.
As such, McDonald’s will start refranchising some 4,000 restaurants. These should be finished by the end of the year. This is a full year ahead of the original schedule. Through this action, McD will also be increasing its global franchised percentage to around 93 percent.
By the end of 2018, McDonald’s is planning on reducing its net administrative and general costs by $500 million. Last year, it managed to save over $200 million in savings. By the end of 2019, the company is expecting to reduce a further 5 to 10 percent from its current cost base.
McDonald’s is planning on attracting new customers and grow its operating margin. This could fall from the high-20 percent range to somewhere in the mid-40 percent range. The company is also hoping to increase its earnings per share growth.
And also to accomplish a systemwide sales growth. This could be in between 3 to 5 percent. These are the company’s plans for the end of 2019 and even beyond.
For the following term, McDonald’s will be targeting 4 pillars. These are its store renovations and delivery system. Also the menu innovation and digital ordering. As these actions should be attracting new customers, they should also help increase the company’s profitability.
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