CHICAGO _ McDonald's thinks it can win customers back by letting diners pay where they want: on their phone, and even, at the curb.
The company unveiled an ambitious plan on Wednesday to regain once-loyal customers that its executives acknowledge left years ago. That plan includes giving diners the option of ordering and paying by mobile phone and picking their food up curbside, services it will unveil at all U.S. restaurants by the end of the year. It also includes wide-ranging efforts in delivery, which one executive called the biggest change to the food industry "in our lifetimes." McDonald's mobile app, which the company has been encouraging downloads of, figures prominently into the plan.
McDonald's officials spoke at a modern industrial art space in Chicago's trendy West Loop neighborhood, just a few minutes away from the burger chain's future headquarters. The space was set up to give speeches and hands-on demonstrations to stock analysts of how customers in the future will order and pay.
Mobile order and pay technology has developed quickly in the food industry and is now widespread, even at quick-service chains like Chick-Fil-A. But McDonald's doesn't want to run into the same problems that have plagued other companies that have jumped on the trend, like Starbucks, which said that wait times expanded and sales suffered because it wasn't prepared for so many customers to order by phone. To counter this, McDonald's is redesigning its kitchens to improve the flow and speed up service. Curbside pickup also is expected to take the burden off in-restaurant lines and the drive-thru, which accounts for 70 percent of all McDonald's customers.
By the end of this year, mobile order and pay is expected to be fully rolled out in the U.S. and at about 20,000 McDonald's restaurants around the globe.
The inside of McDonald's restaurants are getting a makeover, too. The world's largest burger chain is remodeling its restaurants to feature the "experience of the future," a digitally forward dining model that includes kiosk ordering and Bluetooth-enabled table service. The remodels cost about $700,000 from the ground up, or as little as $150,000 for locations that require only modest updates.
The company said that restaurants that have already been refurbished are producing sales gains of between 4 and 8 percent, and they also tend to lead to higher customer satisfaction scores. The kiosks tend to lead to higher average customer spending, more customer visits overall and a rise in group or family sales, executives said.
McDonald's said it expects to remodel about 650 of its restaurants this year, bringing the total number of U.S. restaurants with these digital capabilities to 2,400. It has more than 14,000 restaurants in the U.S. in total.
McDonald's expects all U.S. restaurants to feature the model by 2020. And eventually, the restaurant kiosks will be able to offer more personalization, by recognizing a personal profile from a customer's mobile app that can store favorite meals, different orders depending on time of day, and loyalty points.
Additionally, McDonald's aims to capture rapid growth in delivery. It's running a delivery test through UberEats in Florida and already delivers through some third parties.
McDonald's plans to release first-quarter earnings results April 25.
Starting in 2019, the company plans to grow sales across its operation by 3 to 5 percent, and report earnings per share growth in the high single digits.
