McDonald's to open restaurants faster under new growth plan

McDonald's is launching a new growth strategy, but leaves many questions about exactly what that plan will look like. Building on its 2020 "Accelerating the Arches" plan, the Chicago-based fast-food giant announced today it will seek to speed up the rate at which it opens restaurants. The high-level overview came in a message to employees from CEO Chris Kempczinski and did not give specifics. The company also plans to stop or deprioritize certain unspecified initiatives, which could result in job cuts. Kempczinski said in the message that such decisions will be finalized by April 3. "This will help us move faster as an organization, while reducing our global costs and freeing up resources to invest in our growth," the message said. "We will look to our strategy and our values to guide how we reach those decisions and support every impacted member of the company." The new growth plan, called "Accelerating the Arches 2.0," will also create new leadership roles, better solve customer problems, push innovation out to the markets and reduce work to create efficiencies, the company said. Kempczinski said many stores are operating at capacity, hence the new plan for growth. Moves include giving global CMO Morgan Flatley a promotion. Her new title is executive VP, global chief marketing officer and new business ventures, giving her an expanded scope to "lead new business ventures and opportunities that extend the reach of McDonald’s brand," according to a statement. McDonald's plans to continue investing in its big hitters, such as chicken sandwiches, and campaigns like its popular celebrity Famous Orders. It also will prioritize its MyMcDonald's Rewards program, which helps gather data on customers and ultimately gets people through the line faster. Though it has faced challenges, like all restaurants, McDonald's has held up well throughout an economically tumultuous year. The company's share price rose 2.9% to $269.78 today, which is roughly on par with a year ago. McDonald's drive-thrus helped it whether COVID shutdowns, and now it is benefiting from, among other things, the value it offers. As consumers are cutting back on restaurant spending elsewhere amid inflation, some are turning to McDonald's. The company said store development might include testing new store technology like the order-ahead car lane it's piloting in a new small-format location in Texas. Though it is unclear how McDonald's might accelerate its restaurant opening strategy, it does disclose such details in its annual filings. It opened 1,494 restaurants and closed 661 in 2021—the most recent figures available—up from 977 openings and 643 closings in 2020. At the end of 2021, the chain operated more than 40,000 restaurants worldwide, more than 13,400 of which were in the U.S. Its global store count has changed in the past year, however. The company closed its 847 locations in Russia in 2022, after the country invaded Ukraine. It's also exiting Kazakhstan after suspending operations at its 24 stores there in November, citing supply issues. The increased openings in 2021 were due in part to COVID-19 recovery, according to McDonald's annual filings. It has not yet disclosed such information for 2022. Additionally, McDonald's employed about 200,000 people in its corporate and other offices and company-owned restaurants at the end of 2021, more than 75% of whom were outside the U.S. Over 2 million people work in McDonald's restaurants around the world. The original Accelerating the Arches program that McDonald’s introduced in November 2020 focused on modernized marketing; a renewed commitment to its core products of burgers, chicken and coffee; and a focus on the “three D’s” of digital ordering, delivery and drive-thru. The 2.0 version adds a “fourth D,” restaurant development, and an internal restructuring dubbed Accelerating the Organization. The company promoted four executives, effective Feb. 1, to address aspects of the restructuring. One new position, president of global business services, is meant to help the organization better leverage economies of scale, the company said. It will start off focused on finance and human resources, eventually expanding to marketing, development, supply chain and technology. The company also created a position called chief transformation officer, meant to keep Accelerating the Organization on track. —Bloomberg News contributed

McDonald's rolls out new growth plan—and adds duties for global CMO Morgan Flatley

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