McDonald’s plans to spend about $8.5 billion through 2036 to modernize its restaurants, expand technology and improve operations as the fast-food giant looks for new ways to attract customers and grow sales.
The investment, announced Wednesday, Sept. 23, at the company’s investor day in Chicago, includes about $5 billion through 2030. McDonald’s said the money will be provided through rent relief and other financial support to help franchisees upgrade restaurants and adopt new technology.
McDonald’s operates more than 46,000 restaurants worldwide. The company estimates that the changes could generate about $100,000 in annual cash-flow benefits for the average U.S. restaurant. The upgrades will be funded in part by McDonald’s franchisees, who typically spend up to $450,000 on required restaurant remodels over a decade, AP News reported. Under the new plan, franchisees are expected to spend an additional $800,000 over time, while McDonald’s will help offset those costs through rent relief and other financial support. The company estimates the improvements could generate about $100,000 in annual cash-flow benefits for the average U.S. restaurant, allowing franchisees to recoup their investment in about four years.
McDonald’s is making the investment as fast-food restaurants see little growth in customer visits in many markets, including the United States. McDonald’s CEO Chris Kempczinski said the company needs to attract more customers while making its restaurants more efficient.
Here’s how the changes could impact your future visits to the chain.
McDonald’s NEXT Strategy
McDonald’s is calling its new growth plan “McDonald’s > NEXT.” The strategy builds on the company’s Accelerating the Arches initiative and focuses on four areas: menu, customers, restaurants and employees.
As part of the plan, McDonald’s will update restaurant layouts and kitchen operations and expand the use of artificial intelligence. Planned changes include larger play areas, lockers for delivery orders and more visible coffee preparation areas.
The company also plans to expand the use of scales that help verify order accuracy from about 10,000 restaurants today to 20,000 by 2028.
McDonald’s is deploying ArchIQ, an AI system developed with Google that can automate tasks such as inventory management and scheduling. Its AI-powered drive-through ordering system, Archy, can take orders in English and Spanish with about 90% accuracy.
McDonald’s says the AI tools are intended to free employees from some tasks rather than reduce staffing, according to AP News. Its AI-powered drive-thru system, Archy, could free at least 50 labor hours per week at a typical restaurant as it expands, according to the company. McDonald’s says those employees can instead focus on customer service and food preparation.
New McDonald’s Rewards Program
McDonald’s is also planning a new tiered rewards program designed to encourage customers to visit more often.
Chief Marketing Officer Morgan Flatley said the program will offer different benefits based on how frequently customers visit. Frequent customers could receive faster points earnings, early access to limited-time items and invitations to events. Less-active members could receive incentives designed to bring them back.
McDonald’s has about 370 million loyalty members worldwide, including roughly 220 million active members and 150 million who have not visited in several months, according to Reuters.
Kempczinski said loyalty members account for about 30% of sales and visit McDonald’s about 2½ times as often as other customers.
McDonald’s Explores Burgers, Chicken, Coffee and New Drinks
McDonald’s is testing new menu options for customers looking for more protein and smaller portions.
The company is exploring chicken bowls, burger bowls, grilled-chicken snack wraps and egg bites, according to AP News. It is also considering bringing grilled chicken back to the U.S. menu after removing it in 2020.
McDonald’s plans to expand testing of hand-breaded chicken, which has been introduced at thousands of restaurants in Asia and select locations near Chicago.
McDonald’s is also expanding its beverage lineup. Its McCafé platform now includes refreshers, energy drinks and crafted sodas, with the new beverage offerings available at about 18,000 restaurants. The company is also focusing on its coffee business. Its “Gold Standard Coffee” program is designed to improve the taste of the roughly 8 million cups of coffee the company serves each day through fresher beans, new recipes and upgraded equipment.
New espresso machines in U.S. restaurants will give customers more ways to customize their coffee, including alternative milk choices.
McDonald’s is also looking to build on its burger business. The company has highlighted its Big Arch burger as part of its efforts to offer heartier beef options. McDonald’s says it currently leads the beef category and plans to maintain that position while gaining 1.5 percentage points of market share in chicken and beverages by 2030.
The company said about 60 million Americans are actively seeking more protein. It is also studying how eating habits are changing among people who use GLP-1 weight-loss medications.
USA TODAY reached out to McDonald’s for additional comment on the company’s modernization plans, new rewards program and menu testing.
Contributing: Reuters
Reporter Anthony Thompson can be reached at [email protected], or on X @athompsonUSAT.
Reporting by Anthony Thompson, USA TODAY / USA TODAY
USA TODAY Network via Reuters Connect
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