McDonald’s, struggling to turn around a frustrating decline in traffic, has turned its focus to the area that generates more than two-thirds of its business: the drive-thru.
The Chicago-based burger giant has increased its focus on improving drive-thru speed, using a combination of new-world technology and old-world operations contests to get the job done.
“This is a global focus,” CEO Steve Easterbrook said on the company’s first quarter earnings call this week. “We had a start-of-the-year meeting with all the managing directors of our major markets, and we’re seeing remarkable results.”
Some global markets have knocked 20 to 40 seconds off their drive-thru times, he said.
The effort is particularly important in the U.S., however, where McDonald’s has nearly 14,000 locations, but has struggled to lure more customers to them. Traffic in the U.S. has been down all but one year since 2012.
That continued in the first quarter, despite same-store sales growth of 4.5% in the period.
Executives have blamed at least part of the issue on drive-thru service times, which have slowed for the past five years.
While the chain has focused much of its attention recently on adding kiosks in the chain’s U.S. units, it has shifted that focus now to the drive-thru—especially in the morning, where the chain lost some business last year.
“The last 12 to 18 months, the majority of the focus has been on the in-restaurant dining experience,” Easterbrook said. “We’ve got to get back to the basics of focusing on running better restaurants. So we decided to kick off with a focus on drive-thru during the peak hours of breakfast, which was clearly an opportunity for us.”
Company executives mentioned the drive-thru 16 times on their earnings call this week, according to financial services site Sentieo, and 10 times during both an earnings call in January and an analysts’ conference in March.
Executives mentioned the drive-thru only 10 times during analysts’ events and earnings calls in the prior 18 months, according to a Sentieo search.
“Our drive-thru service has actually slowed down a little bit over the last few years,” CFO Kevin Ozan said in March, according to Sentieo. “You will see a big focus on drive-thru service times.”
The biggest indication that McDonald’s is serious about its drive-thru was the recent $300 million acquisition of decision-logic technology company Dynamic Yield.
The acquisition will give McDonald’s the ability to personalize its drive-thru menus, similar to strategies used by online retailers such as Amazon. McDonald’s plans to add the technology into U.S. drive-thrus this year.
Easterbrook said this week that the technology is already in place in 700 domestic drive-thrus.
“Using data from millions of customers that we serve daily, the technology will get smarter and smarter through machine learning,” Easterbrook said. “This technology will begin to suggest items that can make peak times easier on our restaurant operations and crew.”
The company has also added screens at the drive-thru presenter window, which it calls “zoom boards,” to provide service times in the restaurant and help crew members understand where bottlenecks might be so they can fix problems that slow service times.
But it’s not just fancy screens in the drive-thru. The company is also holding contests to push its restaurants to focus on improving speed in those lanes.
The company’s U.S. restaurants competed against one another in the middle of the quarter to see which one of the company’s markets could have the best service times. The company’s Boise-Twin Falls, Idaho, co-op won that challenge, Easterbrook said.
That challenge, he said, improved service times and customer counts in many of the chain’s restaurants.
It was not, however, enough to pull the chain’s traffic into positive territory for the first quarter.