The takeaways from McDonald’s earnings call yesterday were starkly mixed. Overall earnings beat the Street predictions, while U.S. same-store sales were down 1.3%. The reasons for the drop are attributed almost directly to a slowdown in all-day breakfast (ADB) sales, which propelled the QSR giant for almost an entire year after it launched in the second half of 2015.
Quantifind data shows that the problem may even be larger than the earnings call let on. Note the significant recent drop in buyer conversations about breakfast at McDonalds.
Drilling down just one level deeper, we see another chart which should concern McDonald's execs. Look at how its line of breakfast buyer conversation contrasts with that of Jack In The Box with the 35+ demographic often consisting of parents paying for their children. The chains announced ADB offerings around the same time in 2015.
With the waning enthusiasm for ADB, McDonald's is scrambling for the next big revenue-driving thing. And like many chains in the space, it's looking to technology for help.
On the earnings call, McDonald's said the focus on digital R&D means more funding for in-store self-serve kiosks and a robust mobile app for ordering food.
The challenge is that negative service isn't a glaring pain point for McDonald's customers right now. The screenshot below from SIGNUM for Restaurants shows that complaints from buyers about long wait times are flat year over year.
The biggest opportunity for growth is in the mobile space. McDonalds has tested mobile ordering technology in selected American markets with mixed results. Rapid advances in this area could lead to better quarters in the future; the data shows the opportunity is clear: according to SIGNUM for Restaurants, over the last year only ~.05% of buyer conversations about McDonalds mentioned its mobile app.
Curious which competitors are eating your lunch and how you should fight back? Want to know who’s driving your revenue, and how to drive more? Quantifind can extract the signals you need from your data.