Market Overview

McDonald's CEO: Traffic Isn't Soft, It's Down

McDonald's CEO: Traffic Isn't Soft, It's Down

McDonald's Corporation (NYSE: MCD)'s CEO Steve Easterbrook isn't into playing word games to describe the fast food chain's business. For instance, McDonald's traffic hasn't been "soft" over the past few quarters — it is simply "down."

Speaking as a guest on CNBC Thursday, the CEO acknowledged part of fixing what ails McDonald's is to accept reality. However, the reality may not actually be as bad as many investors think.

Easterbrook continued that McDonald's declining traffic isn't due to a loss of actual customers, rather the frequency of customer visits. In a way, this is a "frustrating" reality, but it is also easier to convince loyal customers to come back and frequent McDonald's stores as often as they used to.

See Also: From Turnaround To Growth, McDonald's Remains A Top Name In Its Category

Mobile Ordering And Delivery

CNBC's Jim Cramer pointed out that it took over a year for Panera Bread Co (NASDAQ: PNRA) to fully improve its mobile ordering system and give customers the seamless experience they expect. So, how will McDonald's avoid Panera's initial blunders?

Easterbrook answered that McDonald's has a fully integrated plan in place that would link all aspects of the restaurant from cash to the kitchen and managers. As such, management has a great deal of confidence there won't be any hurdles moving forward.

Moving on to McDonald's ambitions in delivering food, Cramer asked what it is that Easterbrook sees that makes consumers want to order a McDonald's meal as opposed to other alternatives. The executive suggested customer demand for home delivery already exists, so it isn't like the company is looking to create a new demand.

In fact, since 75 percent of all households are located within just three miles of a McDonald's location, the restaurant chain is in better position to deliver a product to the consumer at a faster pace versus rival restaurants that also deliver.


Related Articles (PNRA + MCD)

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