Corporate Profiles - 2020 - 96

COMPANY OVERVIEW

McDonald's Corp.
Prioritizing contactless experiences, core menu items and breakfast
cDonald's Corp. continued its focus on
digital innovation with the creation of
a new executive position and team focused on the customer-facing digital experience.
Lucy Brady in January became the Chicagobased company's first chief digital customer
engagement officer, leading the newly formed
digital customer engagement team. The team is
focused on delivery, drive-thru and digital, which
already were areas of focus for McDonald's but
became increasingly significant priorities due to
the coronavirus (COVID-19) pandemic.
Limited operations and dramatic changes in
consumer behavior brought on by the pandemic
dragged on earnings, but their impact was softened by widespread drive-thru and delivery capabilities in the United States, the company said.
Drive-thru traffic, which previously accounted
for about two-thirds of total US sales, accounted
for nearly 90% of total sales between March and
April, when mandatory restaurant closings and
stay-at-home orders reached their peak.
McDonald's expects increased use of drivethru, kiosks, mobile apps and delivery to endure after the pandemic.
"Customers are looking for more of a contactless type of experience," said Christopher
J. Kempczinski, president and chief executive

M

officer of McDonald's Corp., during a July 28
earnings call.
McDonald's net income for the second quarter ended June 30 was $483.8 million, equal
to 65ยข per share, which compared with $1.5
billion, or $1.97 per share, in the prior-year period. Revenues totaled $3.8 billion, down 30%
from $5.4 billion the year before.
Global comparable sales declined 24%. In
the United States, comparable sales decreased
8.7% for the quarter, sequentially improving
over the three-month period.
McDonald's in March pulled its all-day
breakfast menu and limited other items to ease
operational and economic pressures.
The pandemic also pressured the company's
performance during the breakfast daypart,
which has been a weak spot in recent years due
to heightened competition and a lack of operational focus.
"As we start to really get into the recovery

phase, getting back that breakfast business is
going to be critical for us," Mr. Kempczinski
said in an April 30 earnings call. "Reestablishing those routines does take time, but we plan
to be very aggressive and make sure that we
get back the breakfast business."
Management increased marketing spend to
accelerate recovery and drive growth.
"The bulk of that spend is intended for really
core menu items and spotlighting some of our
service channel opportunities, like digital," Mr.
Kempczinski said. "... Our view is, right now,
consumers are still looking for sort of the trusted favorites, which is why core menu makes
sense for us."
The company also tested a new chicken
sandwich and limited-edition Spicy Chicken
McNuggets in 2020.
McDonald's has continued to address concerns over its workplace culture nearly a year
after former CEO Steve Easterbrook was terminated due to "poor judgment involving a recent
consensual relationship with an employee."
The company in August sued Mr. Easterbrook
for the return of his nearly $42 million severance package and more after a subsequent
investigation found he had inappropriate relationships with at least two other employees. CP

Chief executive officer -
Christopher J. Kempczinski

McDonald's Corp. net income

McDonald's Corp. net revenues

McDonald's share price
$240

$5,192

$5,924

$6,025

2017

2018

2019

in millions

in millions

$215
$190
$22,820

$21,025

$21,077

2017

2018

2019

$165
$140

96 \ October 2020

Oct. Dec.
2019

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Apr.

June

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Corporate Profiles



Corporate Profiles - 2020

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