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McDonald's US turnaround shifts to technology, speedier service

Thursday, March 2, 2017 - 07:28

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McDonald's Corp on Wednesday announced a push to embrace apps aimed at speeding up service at drive-thrus, which account for about 70 per cent of the fast-food chain's US business, as it looks to woo back diners.

[CHICAGO] McDonald's Corp on Wednesday announced a push to embrace apps aimed at speeding up service at drive-thrus, which account for about 70 per cent of the fast-food chain's US business, as it looks to woo back diners.

The company's US restaurants have suffered four straight years of traffic declines, resulting in 500 million lost transactions since 2012. As part of the push for greater convenience in the United States, which contributes more operating income than any other global market, McDonald's will also offer curbside pickup of orders to reduce wait time at drive-thrus.

McDonald's will start to roll out "mobile order and pay" in the fourth quarter and have it available at all of its roughly 14,000 US restaurants by year-end, Chris Kempczinski, president of McDonald's USA, said at the company's investor meeting in Chicago on Wednesday.

Customers who use the app will have the option to pick up orders at drive-thru windows or in designated curbside delivery parking spots, where a restaurant worker will hand off orders. Customers could also choose to pick up orders at restaurant counters.

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Service times at McDonald's have recently slowed, and the new initiatives are expected to cut wait times, shorten drive-thru lines and prevent customers from skipping visits due to long delays, said Jim Sappington, McDonald's executive vice-president of operations, digital and technology.

McDonald's has lagged other fast-food restaurants such as Domino's Pizza Inc, Panera Bread Co and Starbucks Corp in its use of digital technology.

The company is also developing a loyalty programme and testing delivery in Florida.

The goal is "progress over perfection," Mr Sappington said.

McDonald's will also introduce "mobile order and pay" in about 6,000 locations outside the United States by year-end.

McDonald's said it would use a part of the savings from refranchising restaurants outside the United States to modernise about 650 US outlets, under what it calls the "Experience of the Future" plan.

Those plans include adding self-service kiosks, table service and reconfigured kitchens designed to slash the distance a restaurant's workers walk on a given day by as much as seven miles.

Together with already modernised restaurants, McDonald's aims to end 2017 with 2,500 "Experience of the Future" restaurants in the United States.

Shares of McDonald's closed up 1.1 per cent at US$129.05 after hitting a nine-month high of US$129.99.

REUTERS

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