McD outlines three-part growth strategy

Staff Writer
McD outlines three-part growth strategy

McDonald’s Corp. said Thursday it would increase capital expenditures next year to $2.9 billion, accelerating growth domestically and abroad with the openings of more than 1,300 restaurants, as well as continued remodeling efforts on established units.

Its menu also continues to be a major focus, with items from new burgers to additional desserts planned for test in 2012.

Chief executive Jim Skinner told attendees at its Investor Day conference Thursday that McDonald’s was “succeeding through the same principles that spurred our revitalization,” and that continually refreshing the menu and the in-store experience at McDonald’s have increased not only sales but also traffic this year.

Chief operating officer Don Thompson said increased guest counts, which rose 3.3 percent so far this year, have driven nearly 70 percent of the brand’s global sales growth.

“Our ability to stay close to customers during these times results from our Plan to Win,” Thompson said. “We’re using better data, have deeper consumer insight, and we’re focused on executing at the highest levels.”

Three ways to grow

Thompson said McDonald’s would focus on three key opportunities within its Plan to Win in the United States and around the world.

“Our emphasis on menu, modernizing the customer experience, and broadening access will move the needle in the right direction,” he said.

McDonald’s is targeting sales growth through menu innovation, Thompson said, specifically in beef, chicken, beverage, breakfast and dessert products. McDonald’s plans to test or soon import from foreign markets for U.S. testing the Pub Burger, the 1955 Burger, large chicken wraps, McBites popcorn chicken, the Cherry Berry Chiller frozen beverage, the Magnum McFlurry and blueberry–banana oatmeal.

The plan to broaden the brand’s accessibility involves hitting not only multiple menu dayparts, but also offering items across several price tiers, Thompson said.

“Price value leadership is critical to our strategy,” he said. “We apply the price value screen to menu development in every area of the world and every product category.”

McDonald’s also can achieve all three goals by improving through-put at its restaurants, Thompson said, noting that about 80 percent of U.S. restaurants could increase capacity at peak hours by adjusting labor scheduling and positioning. Mobile ordering, delivery and self-serve kiosks also would be deployed around the world to further these efforts.