McDonald's is overhauling its operations and development organisations to drive the introduction of new menu items and technology faster, seeking to regain traction in a tough fast-food environment, as reported by the Wall Street Journal. CEO Chris Kempczinski announced the strategic shake-up, calling for quicker innovation and better coordination with restaurants.
"Going to just enable us to get faster," Kempczinski said, rebutting complaints about the glacial pace of development, such as a seven-year process to revamp McDonald's iconic burgers.
Driving faster innovation and expansion
McDonald’s global same-store sales plateaued in 2024 following years of steady growth. With US restaurant traffic declining by 2.8% last year and projected to fall again, the company is seeking ways to regain consumer attention amid concerns over affordability and geopolitical uncertainties.
Under the reorganized structure, Jill McDonald will take on the chief restaurant experience officer role as of May 1. She will be responsible for operations, supply chain, franchising, development, design, delivery, and McDonald's innovation lab. The consolidation is to ensure new products and technology arrive in restaurants in a more efficient manner.
"I wanted one person who's actually looking at all these tech things through the eyes of the restaurant general manager," Kempczinski said.
Charlie Newberger, who worked earlier on the company's CosMc's spin-off, will now oversee McDonald's activities in beverages and desserts, with an aim to enhance offerings that could help attract and retain customers.
Prioritising beverages and core menu items
Kempczinski emphasised the value of having specialty leadership for beverages, pointing to the potential of gaining market share in items such as energy drinks and refreshers. "We just need to ensure that our menu offer does not provide a reason why somebody comes to us for their food and they possibly go to the place next door to go get the beverage," he said.
This strategy is indicative of a transition toward pursuing strategies typical in the consumer packaged goods sector, where innovation and speed to market are essential.
Global challenges and future growth
McDonald's has been confronted with various challenges in its core markets. In the United States, it is still recovering from a fatal E. coli outbreak and introduced a value menu a few months ago in an effort to draw price-sensitive buyers. Overseas, sales have slowed down in countries such as France, China, and the Middle East, mainly because of geopolitical pressures and consumer economic squeeze.
In spite of these challenges, McDonald's sticks to its ambitious growth strategy. The company hopes to increase the number of its restaurants globally to 50,000 by 2027, from 43,500 presently.
Kempczinski hopes that the new organisation will drive the company to gain more market share, specifically in beef, chicken, and coffee categories. "A year from now, I want to see this structure delivering measurable results in market share and customer satisfaction," he added.
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