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McDonald’s new CEO voices support for its old plan

Chris Kempczinski told employees that the company is “on the right path as we enter the new year.”
Photograph courtesy of McDonald's Corp.

Don’t expect much to change with McDonald’s new CEO, at least in the short term.

Chris Kempczinski, named CEO two weeks ago following the unexpected firing of Steve Easterbrook, on Monday affirmed support for the “Velocity Growth Plan” the company has been operating under for the past two years.

In a memo sent this morning to employees and obtained by Restaurant Business, Kempczinski said he met with the senior leadership team last week along with the managing directors of the company’s major markets. He said McDonald’s is “on the right path.”

The meetings “reaffirmed my confidence in the leadership we have, in the relevance and strength of the Velocity Growth Plan, and our shared belief that we are on the right path as we enter a new year,” Kempczinski said in the memo.

Kempczinski was one of the architects of that growth plan, which the company launched in 2017, the year he was promoted to president of McDonald’s USA. It features a trio of “growth accelerators,” including new kiosk-centered “Experience of the Future” remodels, digital orders and delivery.

But while he is keeping to the company’s basic strategy, Kempczinski said in his memo that “change also brings opportunities for discussion, introspection and ultimately, renewal.”

He said that he plans to meet with employees throughout the company between now and the end of the year, and invited employees to “share something that makes you proud to be part of McDonald’s and something I could do as CEO to make you even prouder.”

Kempczinski said he would gather employees’ feedback and share some of it in January. “In my view,” he wrote, “McDonald’s can be the best example of opportunity and empowerment in the world, bar none.”

Kempczinski was hired in 2015. He was an experienced executive who was part of a generation of leaders Easterbrook brought in to add more outside voices to a company long considered too insular.

He replaced a CEO in Easterbrook who was well-liked by employees, and whose abrupt firing over an improper relationship with an employee was shocking to those in and outside of the company.

The departure comes as McDonald’s faces numerous external challenges to its dominance and is working to regain traffic it has lost the past two years. Those challenges include a new chicken sandwich from Popeyes Louisiana Kitchen that, by all reports, has been luring consistent lines of traffic for the past two weeks, and Wendy’s upcoming breakfast introduction.

Yet there is little reason for Kempczinski to depart much from the company’s existing plan. After all, it appears to be working: Same-store sales in the U.S. are up 5% year-to-date despite traffic declines and intense competition. And performance has been strong in the chain’s largest markets around the world.

The Velocity Growth Plan features a combination of new technologies that executives believe to be major sources of growth in the coming years.

The company is rapidly adding kiosks to its nearly 14,000 U.S. restaurants. The process for those remodels was one of the primary factors operators cited last year in the creation of the National Owners Association, the company’s first broad-based independent franchisee group.

The chain has also focused intently on digital orders. It bought personalization technology company Dynamic Yield for $300 million, and the company’s drive-thru order screen technology is already in the majority of its U.S. locations.

McDonald’s wants to add that technology into other parts of the restaurants, including kiosks and its mobile app. It is also investing heavily in data and artificial intelligence to continue increasing digital order penetration.

And the chain has gone big into delivery, adding the service in 2017 in the U.S with Uber Eats, then expanding it this year with DoorDash. Delivery sales worldwide have quadrupled over the past three years. Easterbrook called delivery “a big frontier for our business” on the company’s third quarter earnings call last month.

Easterbrook was out as CEO 10 days later.

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