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McDonald's vows to win back lost patrons

USA TODAY logo USA TODAY 3/1/2017 Charisse Jones
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McDonald's executives unveiled plans Wednesday for better burgers, delivery services and more digital-friendly restaurants to return to growth after the loss of "hundreds of millions" of visits by customers who drifted away as the chain fell behind on quality, value and convenience.

The fast food giant briefly halted trading Wednesday as executives laid out plans to investors to once again become the top destination for hungry diners, boosting annual sales growth between 3% and 5% starting in 2019. Once it resumed, investors apparently liked what they heard: share price rose 1.1% for the day to close at $129.05.

“To grow, we must grow guest counts,’’ McDonald’s CEO Steve Easterbrook said during the meeting in Chicago. “It’s as plain and simple as that.’’  

The restaurant chain has introduced all-day breakfast, rolled out novelties such as a junior and jumbo-sized version of its iconic Big Mac, and put more of its restaurants in the hands of franchisees. But executives noted that more needs to be done to reverse a trend in which once-loyal customers are bypassing McDonald’s for its rivals.

“We have to attract more customers, more often,’’ says Lucy Brady, the company’s senior vice-president for corporate strategy and business development. “We’ve lost hundreds of millions of visits from our core customers -- students, teachers, construction workers’’ and others.

To win back core customers, as well as attract new ones, the global restaurant chain will ramp up convenience, the quality of its food, and focus on categories like coffee that offer opportunities for growth.

“Some of our best customers just aren’t visiting as much as they used to -- and we know why,’’ Brady said. “Our historical advantages of quality, convenience and value didn’t keep pace . . .We’re making meaningful improvement in our food, particularly our burger and chicken offerings.’’

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More than 3,500 McDonald’s restaurants, primarily in Asia and the Middle East, offer delivery. And with  75% of the population in top markets like the U.S. living within three miles of a McDonald’s restaurant, the company is looking at expanding delivery options, including possible partnerships with services like Seamless.

The company also wants to do more with the McCafe sub brand of coffee-based drinks to help turn occasional visitors into repeat customers. In Australia, where there are McCafe baristas, and cafe-like spaces, coffee represents 14% of the business, Brady said.

McDonald's will continue to roll-out its “experience of the future,’’ eateries that allow customers to order and pay for sandwiches, fries and other purchases at kiosks, rather than a counter, and then have the food delivered to their tables. 

In the U.S., the upgrades will be in place at roughly 2,500 of its eateries by the end of this year. Most of the nation’s 14,000 restaurants will be revamped by 2020, according to Chris Kempczinski, president of McDonald’s USA.

McDonald's embarked on a turnaround plan two years ago to better compete at a time when dining habits are evolving and many consumers are seeking out quick meals that are fresh and nutritious. After making its popular breakfast items available all day, committing to using cage-free eggs, and other fresh ingredients, and putting thousands of restaurants in the hands of franchisees, Easterbrook says the company is now in a position to shift from revitalizing the brand to focusing on accelerating growth.

The company said it would briefly halt trading of shares during executives' opening remarks. At that time, the stock price was $128.07.

Contributing: Adam Shell  

McDonald's is looking at ramping up delivery, boosting coffee offerings and rolling out more restaurants "of the future'' to win back customers.© SAUL LOEB, AFP/Getty Images McDonald's is looking at ramping up delivery, boosting coffee offerings and rolling out more restaurants "of the future'' to win back customers.
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