McDonald’s Corp., the world’s largest fast-food company, is on a quest to capture more lunchtime business and expand its menu beyond the Big Mac.
Chief Executive Officer Steve Easterbrook wants to use innovations such as a customizable burger and expanded breakfast hours to help the company reach $20 billion in revenue in the U.S. by 2021. This could help the Oak Brook, Illinois-based company wean customers off its iconic burger and fries, building long-term earnings by increasing sales beyond its traditional base. McDonald’s is also willing to experiment with new ways to get its food into people’s hands.
“Our menu is very Darwinian,” Easterbrook said at a town hall meeting at the company’s headquarters in Chicago. “The level of innovation over the years has always been that McDonald’s is not going to get complacent in our ways of doing things, our national chains have to be highly market competitive. If you don’t lead, someone else will be able to do that.”
Easterbrook, 46, also plans to spend $1 billion on renovations at its 15,000-plus restaurants. He wants the brand to be easier to understand and communicate to customers so that they can find the restaurants and get a bit more out of each visit.
McDonald’s plans to try out the customization of its menu with an “Create Your Taste” system, which will allow customers to select the bun, toppings and sauce of a burger as well as the amount of meat and lettuce they want on it. The new store-within-a-store concept, called McSpheres, will aim to give customers a more interactive experience as they walk through the space.
The upgraded restaurants will also have new table service and Wi-Fi. “Think of this as a fast-casual-type experience,” Easterbrook said, referring to the new menu customization system.
Easterbrook is succeeding in some ways, with the average transaction per store rising from $22.71 in 2014 to $24.68 in 2015. McDonald’s didn’t share an updated figure for 2016 yet. Still, fewer people visited its restaurants and more of them are eating away from home, with the share of traffic from customers who visited the restaurants declining.
Earlier this month, McDonald’s introduced its first-ever coffee drinks made with premium beans from Central and South America. The cups use Real Mellow beans from Columbia and Peruvian Esquivias beans from Peru, a practice Easterbrook previously highlighted during his tour of the Starbucks Corp. headquarters in Seattle.
McDonald’s has pushed to revive its food offerings by testing more food items such as chicken sandwiches and mac ‘n’ cheese. And the company is pushing to modernize restaurants, getting rid of the old Coke cups and other elements in its current stores. It’s doing some remodeling, too, incorporating technology such as self-ordering kiosks. McDonald’s also has introduced several apps to make it easier for customers to get their orders.
Easterbrook has also been pursuing global expansion by opening new restaurants and pushing for new partnerships. For example, McDonald’s is teaming up with Uber Technologies Inc. to take delivery to markets outside of the U.S.
“We are becoming a more integrated, local organization,” Easterbrook said. “We want to play in whatever part of the world is of great interest to us.”