In late July, McDonald’s CEO Chris Kempczinski seemed confident that all his chain’s dining rooms would soon be open, saying that “barring resurgences” all of them would be back in use by Labor Day.
That resurgence has happened, likely putting a crimp on the effort. The company reminded franchisees in a call last week that they should consider re-closing dining rooms based on criteria established last year at the outset of the pandemic.
“As much as we want to be done with COVID, we must accept that COVID isn’t done with us,” McDonald’s USA President Joe Erlinger told operators, according to notes of the meeting reviewed by Restaurant Business. “The delta variant is biting deeply into the country’s progress.”
The variant is clearly causing problems. The seven-day average of cases in the U.S. was about 147,000 on Friday, according to the U.S. Centers for Disease Control and Prevention. That’s more than double the number on July 28, when Kempczinski told investors that dining room reopenings were on track.
The surge has come even though nearly 62% of all Americans have had at least one dose of the vaccine—and 52% are fully vaccinated. Of those eligible, 72% have had at least one dose, according to the CDC.
That surge appears to be affecting restaurants’ recovery—Black Box Intelligence said last week that sales appear to be slowing in August as case counts took off again.
McDonald’s has already started requiring customers and employees wear masks in hard-hit areas. The company is now telling operators they need to consider closing dining rooms again.
In July, 70% of the chain’s dining rooms were open and Kempczinski expected them to be open by Labor Day.
The company closed its dining rooms last March, along with everybody else, as states required it. The burger giant has since been slow to reopen them, in part because the company didn’t really need the dining rooms.
Even before the pandemic, 70% of the chain’s sales came through that lane. The drive-thru helped the company recover from the pandemic quickly, and on a two-year basis same-store sales were up nearly 15% in the second quarter. The labor shortage also made it difficult for the chain to reopen the interior.
Yet the company wanted the dining rooms open. “It is helpful, obviously, to relieve some pressure in the drive-thru to open the dining rooms,” Chief Financial Officer Kevin Ozan told investors in July.
Ozan said that sales didn’t return to the 30% levels from before the pandemic, but Kempczinski said that restaurants that reopened their dining rooms still got a sales lift.
“We’re monitoring the impact of the delta variant closely and recently convened together with our franchisees to underscore existing safety protocols, reinforce our people-first approach and provide updates on the rise in cases in the country,” McDonald’s said in a statement.
McDonald’s uses local case counts, regulations and community feedback to determine whether its dining rooms should be open. Owners work with local field offices to make the determination.
In the meeting last week, Erlinger reminded operators of those procedures, suggesting that dining rooms should close again. “Even as fatigue re-emerges, as leaders we must lean in,” Erlinger said. “This means we cannot lose the discipline we had over the past 18 months.”
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