McDonald's Is Spending $6 Billion To Play Catch-Up
For years, you've been able to drive up to California Pizza Kitchen and have someone run your order out to your car. At many Panera Bread outlets, there are parking spots for people running inside to pick up mobile orders.
Now, McDonald's is swiping these ideas and more from fast casual restaurants in a bid to remake its fast-food image.
It plans to spend $6 billion at its 8,700 restaurants in the United States and Canada to implement new ideas.
The renovations will run through 2020. And if the speed of innovation in the industry is any indication, McDonald's probably won't stop there.
But the fast-food giant is way late on many of its concepts, which have been widely applied at fast casual chains, not to mention independent restaurants and other fast-food competitors. Still, McDonald's is giving them a try, knowing it has to get more modern, or lose more customers.
Last year, when it implemented mobile ordering, McDonald's acknowledged that it has lost half a billion potential transactions, aka guests, since 2012. That's as many customers as it had from 1955, the year it was founded, through 1961.
The ideas unveiled on Tuesday include an expansion of the mobile ordering kiosks that McDonald's has already installed in a number of its outlets. McDonald's also plans to modernize its dining rooms and adapt them to local tastes.
Some will get table service and bigger areas for McCafe beverages, and it plans to install digital menu boards inside and in its drive-through areas.
That presumably will allow McDonald's to update more easily when it adds menu items, and to change prices to match any special deals that it offers.
McDonald's is going to implement the curbside pickup offered by numerous places, from CPK and Applebee's to regional chains such as Olga's Kitchen, based in suburban Detroit.
The improvements will not be cheap. The most expensive will be in Texas, where McDonald's is spending $840 million. The renovations will cost $550 million in California, $410 million in its home state of Illinois and $400 million in Michigan.
At least at the outset, the face-lift won't put McDonald's ahead. It will only help it to catch up with features available in many places.
And, it can take a long time to change perceptions, if its experience in Chicago is any example.
Last week, McDonald's opened a futuristic new outlet on the Near North Side that some people have compared in appearance with an Apple store. It has solar panels helping power the restaurant, all manner of technology and a tree-lined setting. The store replaced one long known as the Rock 'n' Roll McDonald's, which had musical memorabilia and a retro theme.