McDonald’s Corp. (MCD) has an aggressive plan to win back customers with mobile ordering and improved food, said a company executive at an investor conference in Chicago Wednesday.
The burger chain has lost 500 million customer visits since 2012, McDonald’s USA President Chris Kempczinski said at the conference. To reverse those declines, McDonald’s will spend $1.7 billion to overhaul its menu, renovate stores, provide digital ordering and improve customer service with, for example, curbside pickup. McDonald’s executives did not provide guidance for 2017 and 2018.
"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," said CEO Steve Easterbrook, according to CNBC. "We are moving with velocity to drive profitable growth and becoming an even better McDonald's serving more customers delicious food each day around the world."
McDonald’s reported fourth quarter revenue on Jan. 23 that declined five percent from the same quarter a year prior. Its earnings of $1.44 per share beat the Street view of $1.41 per share. Despite its fairly new all-day breakfast menu, McDonald’s is still struggling to find a sales driver. (See also, Operational Discipline is Paying Off for McDonald’s)
Some industry experts wonder whether the burger chain's massive investment will pay off.
"McDonald's is definitely late to the game (but) this may not drive growth," Jon Squire, CEO of CardFree, told TheStreet of McDonald's strategy toward digital. "It's all in the consumer experience and having a large user base — initial downloads does not necessarily mean conversion to sales."
McDonald’s stock is up 6.7 percent year-to-date, and up 9.3 percent the past year. Shares have been trading toward the top of a 52-week range of $110.33 to $131.96 in recent sessions.