McDonald's is Strategizing to Win Back its 500 Million Lost Customers

Posted March 05, 2017

"Through enhanced technology to elevate and modernize the customer experience, a focus on the quality and value of our food and redefined convenience through delivery, we have a bold vision for the future and the urgency to act on it", McDonald's chief executive Steve Easterbrook wrote in a statement to investors.

Nearly 75 per cent of people in these countries live less than three miles from a McDonald's, the chain said right after revealing its ambition to "become the global leader in delivery".

McDonald's (MCD) on Wednesday signaled a major shift in its operations, saying that is testing food deliveries and will launch a mobile order and pay platform in US restaurants in the fourth quarter, the latest effort to become a more mobile-oriented restaurant chain.

By the end of the year, McDonald's customers will be able to order via an app and get their food at the curb.

And coffee, the beverage that has fueled the success of other global chains like Starbucks, is also being eyed as an offering that can turn occasional visitors into repeat customers.

Those customers were considered "core" or loyal visitors, Easterbrook said, and they've largely been lost to other fast-food competitors like Wendy's and Burger King, as opposed to so-called "better burger" rivals like Shake Shack and Epic Burger.

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More than 3,500 McDonald's restaurants, primarily in Asia and the Mid-East, offer delivery.

McDonald's is making big changes.

"McDonald's is already one of the largest providers of delivered food in the world, with annual Systemwide delivery sales of almost $1billion across various markets including China, South Korea and Singapore".

It also plans to bring mobile ordering and payment to 20,000 restaurants in some of its largest markets, including the USA, by the end of the year. The restaurant chain also named other delivery services, such as GrubHub Inc., during its presentation.

'Coupled with the explosive growth in third-party delivery companies, the landscape has created an exceptional opportunity for growth. The market responded favorably when trading resumed at 12:23 pm, with shares opening higher at $129.45. This also will allow customers to place an order and pick it up at any McDonald's location, without the risk of the food being prepared at one restaurant and the customer showing up at another.