Hot topics | Coronavirus pandemic

McDonald's Stock: Delivery, Drive-Through, and the Fast-Food Giant's Secret Weapon

McDonald's Stock: Delivery, Drive-Through, and the Fast-Food Giant's Secret Weapon

McDonald's () remained unremarkable for long periods, with its dining rooms closed, and its business relying on drive-through and delivery.

In addition, the fast-food business saw a global sales increase of 4.2 percent in its third quarter (10.2% on a two-year basis) and a 9.6 percent increase in the United States (14.6% on a two-year basis). Systemwide sales also increased by 16% to $30 billion. Comparable-store sales were up 14.6 percent on a 2-year basis

McDonald's is considering implementing a pandemic to meet its potential customers.

McDonald's sales have been driven by Digital.

McDonald's made a conscious decision to invest heavily in its app and ordering kiosks in its stores. Those decisions sounded prescient when the pandemic struck, and CEO Chris Kempczinski explained how the efforts repaid.

We're seeing an increase in sales across these channels in our top six markets, whether it's through our app, in our stores or delivery.

Customers who purchase using an app or an ordering kiosk spend more money. That's probably because ordering digitally removes shame and consumers feel emboldened to get what they want without having to verbalize it to a human.

According to Kempczinski, delivery has been also a driver, and he noted that investing in the area was also a decision made long before Covid was born.

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"Our delivery footprint has grown from just 3,000 of our restaurants to more than 32,000 restaurants across 100 countries over the past five years," he said. "Our customers who continue to change delivery have enabled us to increase our reach and gross sales around the world."

McDonald's success in the pandemic-era was emphasized by the CEO.

"Lastly, our drive-thrus, with a drive-thru presence that is second to none, continue to increase versus pre-pandemic levels, even as dining rooms reopen," he added.


McDonald's has a secret weapon.

McDonald's has been an exception to that, and its program, which was launched in the United States in July, has been an instant success, according to Kempczinski.

Our loyalty program has been an instant fan favorite and provides great value to our most loyal customers. It is also a touchpoint to increase customer satisfaction and increase customer satisfaction in each customer, compared to non-digital.

Customers receive 100 points for each dollar they spend in McDonald's. Points can be redeemed for free items.

"...But the more we learn about loyalty, the more optimistic we get about loyalty," the CEO said. "...Certainly, the benefits you get with the loyalty program is the ability to increase frequency, and in the markets where we operate roughly 80% of the population visit to McDonald's once a year. So it's not that we have a reach opportunity, it's about driving frequency in this business and we've seen in those areas where we have deployed loyalty that it absolutely does increase customer frequency

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