Stephen Easterbrook, chief executive officer of McDonald’s Corp. has ruled out changing the formula for its meals until 2022 or even later — and laid out his vision for where the company could go after that.
And it won’t be much like what we’re used to, he said on Thursday night at a dinner at New York’s Jean-Georges restaurant at the Waldorf Astoria to mark McDonald’s 25th anniversary in New York City. There won’t be any hidden sauces or strawberries in their sandwiches, the boss said.
Most importantly, the company wouldn’t franchise locations to individual franchisees, because it would cause too much upheaval and damage the brand, Mr. Easterbrook said.
“I think it is very important, as I’ve said before, our CEO should be our customer’s customer, not our shareholders,” he said, “My shareholders are the customers of McDonald’s. That’s the purpose of the CEO, to keep that customer sweet.”
He said that it will still be a “nose-to-tail” CEO approach, bringing the corporate leaders to the branches and seeing firsthand what goes on in the kitchens and customer faces to help set his priorities.
“When we look at our menu, we do our hunger experiments, and I won’t tell you what they are, but we will come to each other for guidance,” Mr. Easterbrook said. “Our menu is very Darwinian. It’s boiled down to functional consumers … We’re the only one that knows who our customers are.”
He said that the menu has not undergone a refresh in over two decades, and the company would take more time to redesign.
The company’s new five-year “Customer Experience” plan, announced in November, is aimed at restoring the company’s relevance, he said.
McDonald’s, he said, will focus on increasing speed, service, quality and value.
The first step will be to revamp its kitchens, bringing every line closer together with new touchscreen technology and better fast-food knowledge. The company will eventually update every kitchen but won’t call out individual restaurants, for fear of upsetting franchisees.
By 2020, the McPick 2, Big Mac and Chicken McNuggets combos — the three most popular items on the menu — will no longer have both regular and large fries on them. Other customers will be able to build their own portions of small fries with or without French fries, but the fries will still be doled out in one of the three larger packages that will stay on the menu.
Its popular McCafe beverage, which is expanding into more flavors beyond just espresso, will become a stand-alone chain and not be rolled out on a franchisees’ dime.
By 2022, the average total revenue from the average new McDonald’s restaurant will exceed $2 million. About half of the company’s locations are already considered Class One properties, meaning they can be franchised, but that number will rise to more than 70 percent.
Even with the new strategy, the company expects its overall growth to slow. “I don’t expect us to increase our store count in the U.S. until after 2022,” Mr. Easterbrook said.
Instead, the company plans to focus on introducing new segments. Future growth, for example, may come from something as seemingly simple as mobility.
“In the U.S.,” Mr. Easterbrook said, “our breakfast focus [will] become mobility.”