- McDonald’s has been struggling to grow domestically.
- McDonald’s is running out of excuses.
- But McDonald’s new idea rocks. It may just work.
Boy it's been a hot summer so far, huh? Unfortunately for McDonald's (NYSE:MCD), that makes it tough to continue to blame the cold weather and winter storms for its lackluster U.S. performance. McDonald's has been struggling to show same-store sales growth among its domestic stores citing mostly winter weather challenges in the fourth quarter of last year and the first quarter of this year. With July being the worst month in quite some time, I think we can forget the winter blues. But McDonald's neat new initiative may be just what it needs.
On August 8 McDonald's reported a 3.2% same-store sales drop for domestic stores for the month of July. CEO Don Thompson stated (my emphasis added), "Although July's results were not in-line with McDonald's expectations, we intend to strengthen our performance by addressing the current business headwinds with the discipline and conviction that inspire our customers' trust and loyalty."
One of the things consumers, investors, and franchisees alike have been complaining about is the complexity of McDonald's kitchen. By overcomplicating its menu with new items such as Mighty Wings that use entirely different ingredients than other items it results in a logistical challenge which in turn has led to increased wait times for customers. By taking the "fast" out of "fast food" the very trust and loyalty seems to have been challenged.
McDonald's has a new solution, and I'm lovin' it.
During lunch, McDonald's guarantees your food at lunch in 60 seconds after paying at the drive-through. With 70% of its sales coming from that outside window, it affects a good portion of the crowd during that timeframe. The marketing goal of the idea is of course obvious - get you in and out and trust McDonald's not to waste your time when you have a precious few minutes during your break from work.
There is more to it than that. I honestly found out about the program by accident when pulling up recently. The cashier handed me a sand hour glass timer while explaining it. Then I pulled up to an arm hanging out of the drive-through window ahead with a bag of my order ready. Wow, that's fast. It was a cool and fun experience. There was even a mini thrill of the possibility that I may get a free lunch.
So what happened? I returned a couple of days later and tried again when I was in the mood for fast food. Once again I got my sand hour glass timer and almost instantly an arm was hanging out of the window ahead waiting for me to pull up. Darn, no free lunch. But I was quite impressed and left with a smile twice. Great job, McDonald's. I'm sure I'm not alone. I'm not saying this single move is some huge game-changer for the company, but if it can help pick up sales a percent or two and gain back overall trust and loyalty that spills into other day parts, then McDonald's may be on the right track.