McDonald’s, the quick-service restaurant chain, has committed to a major investment in marketing as it seeks to begin the recovery process from the challenges of the COVID-19 pandemic.
Chris Kempczinski, president/CEO at McDonald's, discussed this subject at the Evercore ISI Virtual Consumer & Retail Summit.
“We announced a significant investment we were going to be making with our franchisees to go [and] drive the marketing side of the ledger,” he said. (For more, read WARC’s in-depth report: Marketing powers McDonald’s recovery from COVID-19.)
More specifically, while the exact increase in outlay will vary by country, the firm has committed roughly 4% of its system-wide sales before the pandemic to marketing.
In dollar terms, that total has been pegged at $200 million by industry title Restaurant Business – and these resources can help fuel sales and accelerate the chain’s efforts to bounce back.
The spread of coronavirus – and subsequent trading restrictions – saw McDonald’s register a comparable sales decline of 3.4% in the quarter ending on 31 March 2020.
Around 1,000 of its roughly 13,800 stores in the US are now open for sit-down dining, and 95% for takeout and delivery, so marketing will have several aims.
Footfall numbers, however, are still down in the mid-teens. “We're not going to be feeling like we are truly back to business as usual until we see those traffic numbers get much closer to where we were in pre-COVID,” said Kempczinski.
It may “take some for that to happen”, he conceded. And communications will be vital in achieving that goal, not least in reassuring consumers that it is safe to visit a McDonald’s outlet.
“It’s about how do we stimulate demand, which is what we’re talking about in the marketing-side, and get people more comfortable coming out to our restaurants because they know we have the safety procedures in place – and then, hopefully, giving them a great experience so that they’re willing to come back,” said Kempczinski.
Sourced from WARC