At McDonald’s, all-day breakfast is a high bar to beat.
The world’s biggest fast-food chain reported its first U.S. comparable-store sales decline in a year and a half on Monday, signaling the excitement about all-day pancakes and hash browns is evening out.
Sales at American stores open at least a year fell 1.3%, though slightly less than the 1.4% decline Wall Street anticipated. On a whole, global same-store sales increased for the sixth-straight quarter as they jumped 2.7% led by strength in the U.K., China, Japan and Latin American markets.
McDonald’s (NYSE:MCD) all-day breakfast menu launched to much fanfare in October 2015 and helped drive an rush of customers to the Golden Arches, leading to a 5.7% leap in same-store sales during the year-ago period. Looking ahead to the current quarter, Easterbrook said he is “confident” in the company‘s ability to transition to a long-term turnaround approach, but also said he is acutely aware the newness of all-day breakfast, unusually warm winter weather and a calendar quirk from leap year, helped contribute to the strong first-quarter results in 2016.
“There’s more we need to do to combat negative guest counts, and we’re prepared to hit it harder in 2017,” Easterbrook said on the company’s earnings call Monday, noting more emphasis on modernizing the company’s U.S. stores is underway, and more focus will center on its Experience of the Future technology imitative.
The McDonald’s chief explained U.S. operations teams have been “deeply focused” on simplifying the customer experience while also working to enhance it as new menu items and store concepts are tested and rolled out.
Specifically, he pointed to in-store kiosks -- already in use in “trendsetting markets” -- that work in tandem with the chain’s front-of-house staff. The idea is customers who want to take more time to study the menu, or make sure the details of a big order are correct would be able to do so at a self-service kiosk, while on-the-go consumers looking for a grab-and-go option can step up to the counter and be helped by a McDonald’s staff member.
“As we invest in technology, get order ahead and pay-ahead capabilities through the app better defined this year…technology can do a lot of the heavy lifting, with service and service times better as a result,” Easterbrook said.
Since the launch of the McDonald’s mobile app in late 2015, Easterbrook said 18 million people have downloaded it and 11 million of those are registered users. Still, he acknowledged the company lags its competitors in this area and continues to test order-ahead, and curbside pickup options around the world.