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The Journal Gazette

  • Associated Press photos Brandon Alba orders food at a self-service kiosk at a McDonald's restaurant in Chicago, one of the company's newest innovations as it tries to reverse its fading popularity in the U.S. market.

  • A self-service kiosk to help customers skip lines at the counter, as well as a planned phone app and a delivery service is part of McDonald's effort to bolster sales in the domestic market.

Friday, July 14, 2017 1:00 am

McDonald's moves to modernize

Fast-food behemoth has big plans to staycompetitive in US

CANDICE CHOI | Associated Press

ROMEOVILLE, Ill. – McDonald's is hoping to make a difference in its future seven seconds at a time.

The company that helped define fast food is making super-sized efforts to reverse its fading popularity and catch up to a landscape that has evolved around it. That includes expanding delivery, digital-ordering kiosks in restaurants and rolling out an app that saves precious seconds.

Much of the work is on display in an unmarked warehouse near the company's headquarters in suburban Chicago, where a blowup of a mobile phone screen shows the app launching nationally this year.

McDonald's estimates it would take 10 seconds for a customer to tell an employee their order number from the app, down from the 17-second average of ordering at the drive-thru. Elsewhere at the Innovation Center, the digital-ordering kiosk shows how customers can skip lines at the register.

“Five, 10 years ago, we were the dominant player in convenience, as convenience was defined in those days,” CEO Steve Easterbrook said last month. “But convenience continually gets redefined, and we haven't modernized.”

The push come as McDonald's Corp.'s stock has hit all-time highs as investors cheer a turnaround plan that has included slashed costs and expansion overseas. Yet the asterisk on the headlines is the chain's declining stature in its flagship U.S. market, where it is fighting intensifying competition.

In an increasingly crowded field of places to eat, the number of McDonald's locations in the U.S. is set to shrink for the third year in a row. At established locations, the frequency of customer visits has declined for four straight years – even after the launch of a popular “All-Day Breakfast” menu.

Still, McDonald's needs to make changes to keep customer visits from falling further. One main focus is the drive-thru, where McDonald's gets roughly 70 percent of its business. Customers who place orders on the mobile app, for instance, could also pull into a designated parking spot where an employee would bring out their order. That would theoretically ease backups at the drive-thru, which in turn might prevent potential customers from driving past without stopping during peak hours.

Then there's the partnership with UberEats to offer delivery. McDonald's gives an undisclosed percentage of the sale to UberEats, in addition to a fee of about $5 that customers pay. So a risk is that delivery could draw from in-store sales, eating into profitability.