McDonald’s CEO: ‘Innovating and reinventing’ brand even when successful is crucial

McDonald’s CEO Chris Kempczinski has pledged the brand will keep “innovating and reinventing” itself even when it is “operating from a position of strength” as it continues to step up its digitalisation process and bring together global marketing.

McDonald’s is a brand that adapts to meet the current environment and doesn’t “rest on [its] laurels”, he told investors today (30 October).

One example of this is the fact “consumers continue to be more discriminating about what and where they spend” given high inflation rates. Value has therefore continued to be a big focus for the brand.

Menu innovations, including the launch of new value options such as “saver meals” in the UK, were highlighted. Chief financial officer Ian Borden also drew attention to how the business is continuing to “provide customers with new experiences further elevating their value perceptions”.

He gave the example of the McDonald’s Monopoly initiative, which ran for its 17^th year in the UK this September. The promotion runs in the digital app as well as on physical packaging, giving customers the chance to “double peel”.

As well as helping to drive value perceptions, this promotion helps to drive use of the app.

“[In the UK], Monopoly once again ignited our fans’ love of the brand and delivered higher levels of app engagement than ever before,” Borden claimed.

McDonald’s sees ‘big opportunity’ to go ‘harder and faster’ on digital

A similar initiative runs in Australia, where the most recent period (quarter three) saw record digital sales, driven by consumers registering in the app and redeeming Monopoly game pieces.

The promotion has also been rolled out in Spain, which delivered increased digital engagement for McDonald’s as a result.

In quarter three, digital sales represented more than 40% of McDonald’s sales in its top six markets (which includes the UK). McDonald’s expanding digital footprint builds a stronger connection with consumers and reaches lapsed customers, Borden claimed.

Looking to the final quarter of the year, McDonald’s in the UK is looking to continue to reach consumers digitally by using promotion. ‘Festive Wins’ will allow consumers to take advantage of a different offer every day through the app in November.

The offers will range from a 99p Big Mac to the chance to enter a competition for a prize at weekends. Consumers will need to use the app to access offers and prizes.

Borden cited the Monopoly digital roll-out across different markets as an example of the “one McDonald’s way” approach. This means the business seeks to roll-out best practice from one of its markets to others in a “globally consistent but locally relevant” way.

As well as in promotion, the company does this in its advertising. For example, earlier this year it launched its ‘As Featured In’ campaign in more than 100 markets, which celebrates the brand’s place in culture around the world.

‘Business built on value’

McDonald’s global comparable sales for its third quarter rose by 8.8% versus the same period last year, to $6.69bn (£5.51bn).

The company has been making price increases as it continues to deal with the impact of inflation; however, Borden said the company had been working closely with third-party advisors who make price recommendations to the business to execute these analytically.

“We have been able to execute [price increase] in a way that works to minimise the resistance from the customer and maximise the flow through that we’re getting as a result of those price increases,” he said.

Kempczinski claimed McDonald’s continues to lead its competitors on affordability and value for money perceptions, adding that value is an integral part of the brand.

“We’re a business built on value,” he added.