McDonald's plans record restaurant expansion, boost in loyalty program
It's all part of its ongoing commitment to its Accelerating the Arches strategy.
McDonald's (MCD) is pulling the McSplorer — Ronald McDonald's red shoe car — into high gear.
On Wednesday morning, ahead of its investor day, the company shared its future plans, including expanding to 50,000 restaurants by 2027, the fastest pace of growth in its 68-year history.
This comes as the company saw high-single-digit sales growth in its international operated markets and its international developed licensed markets last quarter. In late November, McDonald's announced that it agreed to buy back Carlyle's minority ownership stake in its China business for reportedly $1.8 billion.
"We have a clear trajectory for future growth as we continue to build on the brand strength, global footprint and digital ecosystem that have resulted in unparalleled competitive advantages and cemented McDonald’s as one of the world’s leading consumer-facing brands," McDonald’s CEO and president Chris Kempczinski said in the release.
As it leans into its core menu items, it plans to bring the Best Burger, an update to its burger lineup that will impact its Big Mac, McDouble burger, cheeseburger, double cheeseburger, and hamburger, to all markets by 2026.
The size of its chicken business is now on par with beef, per McDonald's. So it's bringing its chicken sandwich, the McCrispy, to all markets by the end of 2025 and expanding it into wraps and tenders.
Last quarter, US sales benefited from higher menu prices, new marketing campaigns like the As Featured In Meal campaign, and growing digital and delivery orders.
This reinvestment in its burgers and chicken comes nearly three years after it entered into the chicken sandwich wars. On a call with investors following its Q3 results, Kempczinski said: "We are gaining market share in both chicken and beef."
In Q3, McDonald's systemwide digital sales — which includes sales made on the app, delivery, or in-store kiosks — totaled $9 billion across its six biggest markets, making up 40% of total sales. That's up from Q2, which counted $8 billion in digital sales.
The company plans to further invest in digital, delivery, and drive-throughs, including by growing its loyalty program.
By 2027, McDonald's aims to boost its active loyalty user base from 150 million to 250 million 90-day active users, and reel in $45 billion in annual systemwide sales.
It's also partnering with Google Cloud (GOOG, GOOGL) in 2024 to improve operations and its customer and crew experience. This includes using generative AI at its restaurants to roll out innovation faster, create less complexity, and ensure accurate orders.
Google CEO Sundar Pichai said while the restaurant industry is already using its technology, it is eager to see how McDonald's can use "our generative AI, cloud, and edge computing tools to improve their iconic dining experience for their employees and their customers all over the world."
Back in 2021, McDonald's sold its automated ordering business, McD Tech Labs, to IBM (IBM). In June, competitor Wendy's (WEN) announced plans to automate its drive-through with Google Cloud, dubbed Wendy’s FreshAI.
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Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.
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