Executive Insights

4 ways McDonald's execs say the pandemic will forever change the restaurant industry

Business Insider US
A rendering of a new McDonald's design.
  • McDonald's executives predict the pandemic will permanently change certain things in the restaurant industry. 
  • "The needs of our customers coming through this pandemic are going to be different than they were going in," CEO Chris Kempczinski said in an event with investors on Monday. 
  • Permanent shifts include customers craving control, familiarity, and contactless options. 
  • Visit Business Insider's homepage for more stories.

McDonald's is betting on the restaurant industry changing forever due to the coronavirus pandemic. 

"The needs of our customers coming through this pandemic are going to be different than they were going in," CEO Chris Kempczinski said in an event with investors on Monday. 

Some of these changes will reverse as Covid-19 cases fall and more people go back to work in-person, such as the decline in the traditional fast-food breakfast business. However, Kempczinski and other McDonald's executives said that the company expects the pandemic to create some permanent changes. 

Read more: McDonald's hires ex-Obama advisor to lead a new team focused on 'positive change,' as the company doubles down on values in the midst of scandals

Gordon Haskett analyst Jeff Farmer highlighted habits McDonald's executives said were "forever altered" by the coronavirus pandemic. These are:  

1. Customers don't want contact. 

A new McDonald's restaurant design.

Contactless experiences are the future. McDonald's is doubling down on what it calls the "three Ds," or digital, delivery, and drive-thru. That includes new designs that will use a third drive-thru lane, speeding up the process even further. 

Read more: McDonald's unveils the future of its business, from minimalist packaging to high-tech, triple-drive thru stores

2.  People crave what they know and trust. 

Throughout the pandemic, massive brands have cashed in on people seeking familiarity. McDonald's executives expect the trend to continue. And, with 75% of people in the US living within three miles of a McDonald's, Famer says the company is well-positioned for the shift. 

3. Anything new can be a turnoff. 

McDonald's is tweaking packaging while doubling down on its core menu.

The flip side of people seeking out what they know is that customers are becoming less experimental. McDonald's is responding by doubling down on core menu items — burgers, chicken, and coffee. Instead of experimenting, McDonald's wants to improve the quality of existing menu items, with new burger buns and the 2021 launch of a revamped chicken sandwich. 

"We expect a '21 enhanced chicken sandwich, coffee improvements, and MCD's plant-based platform (McPlant) will provide buzz and help drive guest count," UBS said in a note this week. 

Read more: McDonald's plans to roll out a new fried-chicken sandwich as the fast-food giant gears up against Popeyes and Chick-fil-A

4. Customers want control. 

Presented with more options during the pandemic, people are not going to give up the array of channels to order food, whether that be drive-thru, delivery, or mobile ordering. Today, Farmer writes, McDonalds has "an offering that can be tailored to fit the needs of most consumers."

"We felt the plan addressed two customer factors that we believe are critical to McDonald's sustaining sales momentum — convenience and affordable value; therefore, we are comfortable projecting mid-single-digit sales growth for the foreseeable future," Stifel said in a report on Monday. 

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