McDonalds 2Q15 Earnings Call Notes

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Regain trust and loyalty

“Our number one priority is to return critical markets to sustainable growth by regaining customers’ trust and loyalty”

Disappointing results by positive momentum

“While financial results remained disappointing in the second quarter, we are seeing early signs of momentum.’

Results in the US have been disappointing

“Let’s now transition to the U.S., which represents over 40% of our business. Results here have been disappointing. We are committed to changing the trajectory of the business and are resting to nearly 3 years of decline. We are working to promote discipline back in the business, adapt more quickly to changing trends, offer more compelling value across the menu of bringing new energy and tenacity to simply running better restaurants.”

Focusing on customer service

“we are enhancing the customer service experience. This starts with the basics. We have reduced the number of menu items in restaurants to make it easier for teams to deliver better service. We are improving the speed of our drive-throughs with simplified menu boards.”

Implemented new cooking methods

“We have implemented new cooking methods in our restaurant, so we are seeing strong growth changing how we sear and grill our beef to deliver hotter, juicier sandwiches”

New products are quality over quantity

“I don’t want to lose sight of the fact that toasting of buns, better searing of beef, taking care of the dressings and the packaging and the rest of it, that gets noticed by customers. With regards to, if you like, new product development, I would say, at a national level, we will be looking at, if you like quality over quantity. It’s not about having lots of national LTOs, because that does complicate the business. ”

There certainly are labor pressures around the world

“there are certainly labor pressures around the world from a wage standpoint. I don’t know that we think of it as kind of an undue pressure anything that’s going to harm our business. But certainly, labor costs on a pressure right now. In several states, as you know minimum wage has increased. For us, margin is essentially our top line gain. So we need to grow sales. Certainly, we need to grow comp sales in order to grow our margins. And the specific labor moves that we have taken are what we believe we should be doing as a business to make sure that we attract, recruit and retain the best employees we can for our business.”

We’ve been losing the value customer

“if you look at our product mix and where we have seen a loss in the competitive gap open up is we have lost of the value end of our menu. So breakfast remains very resilient. So it’s really through the daytime daypart where we have seen that gap open up over the last probably 12 to 18 to 24 months. “