McDonald's, Chipotle speed up service
Several quick-service restaurant chains are finding new ways to ramp up sales during busy hours.
By Katey StapletonRecognizing that no one wants to stand in line, particularly for "fast" food, McDonald's (MCD) and other rivals are adapting new technologies to speed service along.
As the economy improves, fast-food chains have begun spending on new ways to cut the wait short, according to The Wall Street Journal. Along with shaving minutes off of order fulfillment during breakfast, lunch and dinner, the companies are beefing up employee hours to provide more hands in the kitchen.
"How many people we have on the floor during those peak hours and where are they positioned is very important to driving more transactions," McDonald's chief financial officer Peter Bensen said on a recent conference call.
But that's not all. McDonald's hopes to flip its underperforming sales trends and regain investor confidence by going the extra mile in upcoming quarters.
"MCD could attack underperforming sales trends with a redirected marketing strategy to highlight value leadership and reintroduction of 'core' product innovation," Oppenheimer noted following a meeting with McDonald's management.
The golden arches may be looking to take a page out of Chipotle Mexican Grill's (CMG) book, as the restaurant chain's second-quarter traffic growth reached 3.4% -- a strong number in analysts' opinion. Although the company's speed is undoubtedly improving, (Chipotle beat its 2007 record last quarter by serving six additional lunches per day), diners have still found it difficult to move through the buffet-style line at the speed they crave.
Chipotle currently trades around $290 -- down approximately 14% this year. The restaurant's management knows that the company is capable of much more. Co-CEO Monty Moran told The Wall Street Journal that there are still long lines every day and people often leave because of it.
McDonald's, Starbucks and Chipotle are undoubtedly on a mission to increase profits in similar ways, but Yum Brands (YUM) has chosen to take a different route. Pizza Hut, one of the company's three popular concepts, is set to open smaller delivery locations as a part of Yum's effort to accelerate unit openings from 500 per year to 1,000 annually over the next five years.
Regardless of the tactics being used, the quick-paced restaurant race is definitely on. McDonald's closed Thursday at $88.70, nearly unchanged from Wednesday's close. Yum Brands closed at $63.36, down nearly 1%.
In addition, upper managers were too preoccupied cutting labor percentages ( hours of paid labor to workers vs. store profits) to actually have enough people to properly run a store. Our goal was around 15% labor, which meant only 15% of our profits for the hour were being paid to employees and the remaining 85% was kept for the company etc. Our store made roughly $700 an hour, meaning only $105 was paid to the entirety of the workers.
Speed is great, but accuracy is better. It does no good to be fast if you can't get the order right. There is probably a finite limit to how fast the food is served vs. if the order is correct. This might, perhaps, require a separate cooking line for the drive-up vs. the walk-in customers. I have often been virtually ignored as a walk-in customer when the drive up is backed up. People at the drive up should have their order in mind before they pull up to it. Also, as speed goes up, quality is likely to decline.
On another note, I rarely eat at McDonald's, but when I do, I only buy from the dollar menu. Same taste, but much cheaper. I realize, however, that this mindset does not optimize profits for McDonald's, but I have my own economies to consider.
People, this is America! Land of the free! Instead of continuing to complain about the same thing, just stop visiting McD! Please do not come through the drive through and PLEASE stay out of the Lobby because I dont want to see your ugly unsatisfied american face! (I am White BTW) You say you are being poisoned? Well you are poisoning yourself because you keep coming back for that $1 McDouble and McChicken OVER AND OVER AGAIN! McDonalds offers a competitive pay and employs MANY of THOUSANDS of people all over the world to SERVE YOU! Show the employees more respect and maybe your order will come out correct! Unappreciative Freaks, You want to complain about service being slow but you are the ones that want to be difficult and cant be satisfied with how the food is already made! There are highly paid chefs that come up with the menu you all complain about and McD has done so much to offer more options that cater to the dumb people that can never be satisfied! Now McD wants to IMPROVE your experience that you already so deeply hate and you just keep ranting about your bad experiences...TYPICAL! No wonder so many people in this world hate Americans!
The modern Mcdonalds reasturant is slow by design. Not counting the driveup window, unless there's a rush of customers say from a bus you will almost never find more than one register open. And then in the kitchen there is rarely more than one person preparing burgers. That same person is usually the one filling chicken orders too. So by design even if they open more registers can can only serve one customer at a time no matter how busy they may be. They need to return to the old way of doing things. A real grill and burgers pre-made and ready to serve. Then open more registers so the customers get in and out quicker. The average McDonalds in the late 70's and early 80's Could serve more customers at a faster pace with a smaller staff than any of them tend to have today. Which goes to show that just because you can find new ways of doing things, it does not mean the new way is better. Often times as in this case the old way was clearly the better And thats without even stating that the food back then was fresher and and because it was cooked at the premisis and not just reheated it tasted better too.
McDonalds needs to go back to quality standards. I can't remember the last time I got a burger that was hot enough to melt the cheese. The food is disgusting. Buns taste like sawdust, meat is like cardboard and barely warm. Breakfast is worse yet. Frozen pancakes, eggs that look like the size of a quail egg, muffins that taste like crap. The only thing McDonalds is fucused on are the McCrappie drinks that have huge profit margins. I worked for McDonalds in the '70's and we would have been fired for serving the crap they serve today.
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