Chris Kempczinski, McDonald’s U.S. president, is hitting the gas as the global fast-food chain works to modernize its U.S. restaurants and woo back customers who have drifted off.
“We’ve probably changed more in the last year than McDonald’s has changed in the last five years, maybe even longer,” said Kempczinski, 49, who joined the company in 2015.
The pace of this change has been “unprecedented” but also necessary, said Kempczinski, a former Kraft Foods Group executive who lives in the Streeterville neighborhood with his wife, Heather.
Come January, McDonald’s will launch its new Value Menu with items priced at $1, $2 and $3, which will replace the current McPick 2 Menu. Earlier this year, the fast-food giant introduced its line of more upscale Signature Crafted sandwiches, while also expanding its McCafe espresso drink offerings.
The chain also has worked to improve its restaurant experience and is in the process of rolling out delivery and curbside pickup to all 14,000 U.S. restaurants.
The following interview has been edited for length and clarity.
Q: Did you eat McDonald’s as a kid?
A: Oh yeah, all the time.
Q: Are you just saying that?
A: No, I’ve said that to the franchisees. It’s funny because my grandmother, her big thing for every Christmas was she would give us these McDonald’s gift certificates that my mother would put into our stockings. And then in high school, the place after Friday night football games, the place to go and hang out, was at the local McDonald’s.
Q: The restaurant industry’s pretty stagnant on the whole in terms of traffic. What is McDonald’s doing to see growth in visits?
A: We did a lot of work to understand what happened over the last several years, where did we lose the traffic to. And what we found was we had just lost sight of the customers. We weren’t offering great value anymore. Our experience in our restaurants had gotten worse. And frankly, the market had been innovating on food and we hadn’t kept up with food innovation.
And so for us, our focus has been on getting back to being competitive on value, doing a number of things to improve the quality of our food — whether it’s through things like cage-free eggs or 100 percent white meat in chicken but also just menu news like Signature (Crafted). And so what we’re encouraged by is there’s a lot more we can do.
Q: Can you give me some sense of what the new Value Menu will look like?
A: No! (laughing) No way. I’m not going to tell our competitors what I’m putting on that thing. … We’ll see you Jan. 1 in the restaurant.
Q: What’s the thinking behind going from the Dollar Menu, then to the McPick 2 and now to this new format?
A: For all of us, it’s about how does our value offering resonate with our customer relative to what the competitors are doing at the time. Value in our system is this Rubik’s Cube of you’re trying to find an idea that’s powerful and resonates with the customer that also has an economic profile that will work for the owner-operators.
Q: How’s delivery going?
A: It’s going great when you consider we just started in May and now we’re in 4,000 some-odd restaurants (out of about 14,000 total in the U.S.). It’s gone really well. The operational ease in getting it integrated into restaurants has probably gone better than expected in terms of just how easy it was to get plugged in. Our big opportunity on it continues to be awareness. We just haven’t gotten enough people to be aware that you can get delivery at McDonald’s through UberEats.
Q: On the last investor call, you listed some urban markets doing well with delivery — New York, Boston, Miami. You didn’t mention Chicago. Has it not caught on here yet?
A: Chicago has not been as a strong as I would have expected. With the Chicago team, let’s just say I flipped them the New York numbers and the LA numbers, and I say: “I’m just saying, you don’t want to be the Second City in this.”
Q: Is McDonald’s looking at delivery as an investment for the future, something that will be big in 10 or 20 years, but right now you just have to work out the kinks?
A: The great thing about delivery is we actually have about 20 years of experience with it — it’s just all in our international markets. We have a $1 billion delivery business in Asia and we’ve been in it for a long time. We have a huge business in the Middle East for delivery and we’ve been in it a long time. And the growth that we’ve seen over there, that was kind of how it came to the U.S. So yes, this is a long-term play for us. This isn’t just a flavor of the month. We’re going to be in this for the long haul.
Q: How are the franchisees responding to all this change?
A: I’d say the franchisees are excited and anxious at the same time. They’re excited about the ideas, but there’s also a “Holy cow, I can’t believe we’re going to do all of this.” That’s like that old adage: How do you eat an elephant? One bite at a time. … It’s probably fair to say it’s unprecedented for what we’ve done in the U.S. — the pace and the number of things we’re going to launch. Now we just have to show we can do it.
Q: After McDonald’s recently announced a new animal welfare policy for chickens, some animal rights groups said McDonald’s didn’t go far enough and that it needs to switch to breeds of birds that don’t grow so fast and get so large that they can’t stand up. What’s your response to some of that criticism?
A: Anytime we’re doing things with the supply chain we’re trying to take in a number of points of view. … Our thing at McDonald’s — one of the great things about working for the brand — is when we move, we can move the whole industry. We try to act like a leader. Will it satisfy everyone? Nothing ever really satisfies everyone. … But we think it’s a significant improvement that’s going to end up having a ripple effect across the industry.
Q: What will the headquarters move downtown do for the business?
A: I think it’s going to be transformative for the culture of this place. Going from a frankly kind of pastoral, sleepy corporate setting where we are now into the city, where it’s going to be very vibrant. I think it’s going to bring a different level of energy that probably reflects our aspirations for where the business needs to go.
Twitter @GregTrotterTrib
