Latest news with #ChrisKempczinski
The Star
2 days ago
- Business
- The Star
McDonald's to accelerate store expansion in China
Consumers try wireless mobile phone charging by riding spin bikes to generate electricity at the McDonald's zero carbon restaurant in the Shougang Park in Beijing. [Photo provided to China Daily] McDonald's Corp said it remains optimistic about its performance in China and plans to accelerate store expansion in the country as part of its international growth push. The fast-food giant reported a 1 percent decline in global comparable sales in the first quarter of 2025, compared with that of a year ago. Its US comparable sales fell 3.6 percent and international developmental licensed markets increased 3.5 percent. Executives pointed to China as a bright spot amid an uneven global landscape. "In China, our performance remained stable, driven by an increase in delivery share, the success of Big Bites, Value meals and strong performance in chicken," said Ian Borden, McDonald's chief financial officer, during the company's earnings call. "We're encouraged by what we're seeing from our China business." Chairman and CEO Chris Kempczinski echoed the sentiment in the quarterly earnings release, emphasizing McDonald's enduring brand value in times of economic uncertainty. China continues to play a central role in McDonald's international strategy. Of the roughly 2,200 new stores the company plans to open globally in 2025, nearly 1,000 are expected to be in China, the company said earlier, according to Yicai, a Shanghai-based business media. That would account for almost half of its international franchised expansion this year. The company currently operates over 7,000 restaurants in China, with more than half located in third to fifth-tier cities. Since 2017, McDonald's China has been operated by a consortium led by CITIC Capital. Its highly localized supply chain has helped insulate the business from external shocks, including the recent trade tension with the US. "More than 90 percent of our ingredients such as chicken and potatoes are produced, processed and procured within China," said Gu Lei, McDonald's China chief impact officer, in an interview with Yicai. In response to a nationwide shift toward rational consumption, McDonald's China launched a "Value Year" campaign in 2025, featuring four major initiatives aimed at enhancing perceived value: Big Mac, Mix and Match 1+1, a membership rewards program and a Gold Card offering. "Chinese consumers are not just chasing low prices, they're looking for quality and experience at a reasonable price," Gu said, citing findings from a survey of over 40,000 young consumers. The company also continues to diversify its store formats to cater to local preferences, expanding drive-through locations, smart pickup options, family-friendly restaurants and mobile McCafe carts to increase convenience and customer engagement. "McDonald's localization strategy has proven highly effective," said Zhu Danpeng, an independent food and beverage industry analyst. "The company has deeply tapped Chinese dietary culture and consumer habits through a localized operating system and product innovation. "In today's uncertain global economic climate, consumers are increasingly drawn to brands that deliver strong value for money — an area where McDonald's continues to excel. Its sales success reflects a keen understanding of evolving local market dynamics," said Zhu. - China Daily/ANN
Daily Mail
2 days ago
- Business
- Daily Mail
McDonald's closing five remaining CosMc's locations
McDonald's is closing its five remaining CosMc's restaurants for good just 18 months after launching . The fast food empire will shutter the locations next month after attempting to compete with chains like Dutch Bros. and Starbucks with the drink-focused spinoff. 'It's right down the road from dead. Hardly ever more than 2 cars in line and no one in the lanes. Stupid idea, stupid locations,' a customer responded. 'Well that was quick,' another user said of the closures. CosMc's was operating in Illinois and Texas, and was described by CEO Chris Kempczinski as a 'small format concept with all the DNA of McDonald's but its own unique personality.' McDonald's began closing the CosMc's locations earlier this year, shutting three in January . CosMc's restaurants were the talk of social media after the company opened its first location in December 2023 . The concept was initially a success, and customers from France and the UK flew to Illinois to try one of its unique drinks. Some of the fun menu options include a Sea Salted Carmelactic Shaken Espresso and a French Toast Galaxy Latte. Experts from Cybersyn concluded the restaurants were off to a strong start, with each store generating about $1.6 million in sales within the first 8 months of operation. While it's unclear how much money CosMc's has made this year, McDonald's has been on a bumpy ride regarding its finances. The chain suffered a 3.6 percent sales dip in the first quarter of this year - the biggest drop since the height of the Covid-19 pandemic. Now, the company is looking to lure back customers through perks such as the McValue meal deal . Although there will no longer be any CosMc's restaurants, some of its menu items will live on. Kempczinski said the chain is testing new customizable drinks inspired by the soon-defunct spinoff with some franchisees later this year. CosMc's is not McDonald's only failure. The chain previously made headlines for attempting to sell a meat-free burger in America . The burger, dubbed the McPlant, was axed in 2024 following years of unsuccessful tests in California and Texas. Canadian McDonald's restaurants tested a McVeggie earlier this year with the potential of bringing it to the US.
Daily Mail
2 days ago
- Business
- Daily Mail
McDonald's abruptly shuts five locations and fans are confused: 'Well that was quick'
McDonald's is closing its five remaining CosMc's restaurants for good just 18 months after launching. The fast food empire will shutter the locations next month after attempting to compete with chains like Dutch Bros. and Starbucks with the drink-focused spinoff. Named after a retro McDonald's mascot, the fast food giant had been using CosMc's as a test for customers interested in colorful, customizable drinks and signature brews. The chain hoped the spinoff would draw in loyal fans, but instead many did not know it even existed. 'Hard for something to be a success if nobody heard of it,' a Reddit user wrote in a post. 'It's right down the road from dead. Hardly ever more than 2 cars in line and no one in the lanes. Stupid idea, stupid locations,' a customer responded. 'Well that was quick,' another user said of the closures. CosMc's was operating in Illinois and Texas, and was described by CEO Chris Kempczinski as a 'small format concept with all the DNA of McDonald's but its own unique personality.' McDonald's began closing the CosMc's locations earlier this year, shutting three in January. CosMc's restaurants were the talk of social media after the company opened its first location in December 2023. The concept was initially a success, and customers from France and the UK flew to Illinois to try one of its unique drinks. Some of the fun menu options include a Sea Salted Carmelactic Shaken Espresso and a French Toast Galaxy Latte. Experts from Cybersyn concluded the restaurants were off to a strong start, with each store generating about $1.6 million in sales within the first 8 months of operation. While it's unclear how much money CosMc's has made this year, McDonald's has been on a bumpy ride regarding its finances. The chain suffered a 3.6 percent sales dip in the first quarter of this year - the biggest drop since the height of the Covid-19 pandemic. Now, the company is looking to lure back customers through perks such as the McValue meal deal. Although there will no longer be any CosMc's restaurants, some of its menu items will live on. Kempczinski said the chain is testing new customizable drinks inspired by the soon-defunct spinoff with some franchisees later this year. Social media users were either unaware of the spinoff's existence or unsurprised the concept failed CosMc's is not McDonald's only failure. The chain previously made headlines for attempting to sell a meat-free burger in America. The burger, dubbed the McPlant, was axed in 2024 following years of unsuccessful tests in California and Texas. Canadian McDonald's restaurants tested a McVeggie earlier this year with the potential of bringing it to the US. The company has not revealed the results of the McVeggie run, and it has not announced plans to bring it to the US. The chain's competitors have also run unsuccessful tests, including Chipotle's Farmesa Fresh Eatery spinoff. the future of Taco Bell beverages.'
Hindustan Times
2 days ago
- Business
- Hindustan Times
McDonald's pulls the plug on CosMc's spinoff and app in two states after just 18 months
McDonald's is making some big changes. The company has announced it will be closing a specific type of diner and shutting down its app in the next few weeks. This is part of a new plan shared by CEO Chris Kempczinski to update the company's strategy. Also Read: Memorial Day 2025: 20 wishes and quotes you can send on WhatsApp to honor veterans McDonald's opened its spinoff restaurant, CosMc's; however, just after 18 months, the food chain announced that it would close all five locations in June. CosMc's, inspired by its 1980s alien mascot and focused on quirky beverages like S'mores Cold Brew and Churro Frappé, is closing all five of its locations next month. Along with the closures, the CosMc's app will also be discontinued, ending this unique part of McDonald's business, as reported by The US Sun. Earlier in January, the fast food chain closed down three of its CosMc's stores but was adamant that it was still growing, and with a possibility of opening even more stores. The spin-off restaurant was introduced as a rival to dominating beverage outlets such as Dutch Bros, Scooters, and Swig. However, on Friday, McDonald's announced that it will be closing down the rest of its locations and moving into a new phase. The chain said, 'The main goal of the CosMc's test was to create a launchpad for learning for the McDonald's System– and the insights we've gathered have given us a whole new way to get closer to our fans.' They continued, 'We've learned so much, so quickly from the CosMc's test.' The company added, 'As part of this next testing phase, starting in late June, we will be closing all stand-alone pilot CosMc's locations on a rolling basis and discontinuing the CosMc's app." Out of the closing locations, four are located in Texas and the rest in Illinois. Also Read: Fleet Week 2025: Check out list of remaining events The closures come shortly after McDonald's CEO Chris Kempczinski announced a shift in the company's strategy during a recent earnings call, signaling a new direction for the fast-food giant. He revealed, 'We have discovered some interesting learnings through our CosMc's test, which has better informed our understanding of consumers' customization preferences and interest in new, emerging beverage categories.' The CEO explained that instead of expanding the CosMc's spinoff, McDonald's will bring its popular beverages to traditional locations. The new flavors, developed through the CosMc's 'learning lab,' will be tested at hundreds of restaurants sometime this year.
Courier-Mail
4 days ago
- Business
- Courier-Mail
McDonald's battles ‘fierce' Aussie competition as global sales drop
Don't miss out on the headlines from Restaurants & Bars. Followed categories will be added to My News. The famous golden arches might be losing their glow, with McDonald's recording a surprising drop in global sales as the fast-food giant battles 'fierce' competition in Australia. McDonald's reported a one per cent fall in global comparable sales in the first quarter of the year compared to the same period in 2024, which included a Leap Day. In its US birthplace, McDonald's recorded a 3.6 per cent decline in sales – marking the biggest sales drop since the pandemic, when restrictions were in place. McDonald's attributed a decrease in the number of comparable customer transactions at restaurants as a major factor behind its decline in US sales. McDonald's Chairman and CEO Chris Kempczinski said customers were 'grappling with uncertainty'. 'McDonald's has a 70-year legacy of innovation, leadership, and proven agility, all of which give us confidence in our ability to navigate even the toughest of market conditions and gain market share,' Mr Kempczinski said. McDonald's recorded a 3.6 per cent decline in sales in the US. Picture: Charly Triballeau/AFP In Australia, research suggests the fast-food giant's sales are rising, with market research firm IBISWorld estimating McDonald's sales to be $5.7 billion in 2024-2025, compared to $5.4 billion in 2023-2024. But it's not all good news, with the fast-food giant having to fight off hungry competitors eating into its market. 'While absolute sales figures might be rising, it is anticipated that McDonald's is losing market share to other fast food providers in Australia,' IBISWorld Industry Team Leader Disha Jeswanth told adding 'McDonald's faces fierce competition from several sources'. 'Within the fast food segment, the main differentiator is price in terms of value for money.' According to IBISWorld, McDonald's market share has consistently dropped from 21.5 per cent in 2021-2022 to 19.3 per cent in 2024-25. McDonald's is fighting off hungry competitors eating into its Australian market. Picture: Glenn Campbell Aside from competing against KFC, Dominos as well as burger joints of the likes of Hungry Jack's and Grill'd, McDonald's is also facing off with Mexican food brand Guzman y Gomez (GYG) which has proven itself to be a 'major emerging competitor'. 'Guzman y Gomez is capturing market share through its perceived healthier food offerings,' said Ms Jeswanth. 'While a large burger meal at Maccas is averaging above $15 these days, GYG is offering a burrito bowl for a similar price. The brand is also marketing its use of free-range chicken and high-quality ingredients. 'GYG's next move involves expanding into drive-thru operations, which will further weigh on McDonald's demand.' 'Grill'd, on the other hand, although it doesn't compete with Maccas on the basis of price, is offering gourmet burgers that are often a healthier choice.' To counter this, Ms Jeswanth notes McDonald's has continued sourcing over 90 per cent of its ingredients locally and using 100 per cent RSPCA-approved chicken. 'McDonald's also provides nutritional information with its food orders to maintain transparency. However, public perception around McDonald's food quality remains a challenge.' Guzman Gomez is a major emerging competitor against McDonald's. Picture: NewsWire/Gaye Gerard Jump in price An increase in prices, as other restaurants have done amid rising cost-of-living and inflation, have also hurt McDonald's reputation. 'McDonald's value proposition has long centred on providing affordable meals, appealing especially to budget-conscious consumers,' said Ms Jeswanth. 'However, consistent price increases in recent years, driven by rising input costs and wages have eroded this perception of value.' The price of a large fries has increased by more than 50 per cent since 2019, from $3.20 to $4.85 as of this month, while a classic Angus burger is up more than 25 per cent from $7.95 to $10. The increase has come at a time when cost-of-living pressures has changed Australians' spending habits. 'Lower-income households and younger consumers are extremely cautious of their discretionary spending', said Ms Jeswanth. McDonald's has seen an increase in prices in recent years. According to Finder's Consumer Sentiment, only 61 per cent of Australians reported spending money on food delivery or takeaway services per week in May 2025, compared to 68 per cent in May 2022. 'The cost of living is putting significant pressure on household budgets, and one area many Australians are cutting back on is non-essential spending such as takeaway,' Graham Cooke, head of consumer research at Finder told 'Fast food prices of some menu items at McDonalds have been rising faster than inflation. 'At the same time, local fast-food brands have diversified their offerings.' 'When groceries, energy bills, and housing costs rise, the convenience of restaurant-prepared meals becomes a luxury that is harder to justify for many individuals and families,' he added. 'What might have been a weekly or even bi-weekly habit could shift to a monthly treat or only for special occasions.' X Low customer satisfaction According to Sydney-based Fonto, which conducts weekly surveys of customer experiences at 19 Quick Service Restaurants (QSR) across Australia, McDonald's consistently underperforms on customer satisfaction compared to other brands across the last 16 months. In the first quarter of the year ending in April, McDonald's scored 69 per cent overall satisfaction – a drop from 71 per cent compared to the same period last year. Out of the top 15 brands, the fast-food giant was ranked last in the first quarter of this year. 'We're seeing consistently that McDonald's ranks towards the very bottom,' Fonto CEO Ben Dixon told adding it sits in the bottom third of 19 brands. Meanwhile, competitors GYG, Crust and Grill'd made up the top three brands for overall satisfaction. 'They're really focusing on fresh and healthy, they're brands that an athlete would consider buying from, and their prices aren't too far away. The gap in price used to be quite significant between, say, a Grill'd burger and a McDonald's meal, and it's not as big anymore.' Grill'd beef burgers range from $13.50 to $16.50, according to current prices listed on its website. In the first quarter of the year, McDonald's ranked 13 for price out of the top 15 brands. 'McDonald's customers have consistently got the least satisfaction with their prices than any of the other brands,' said Mr Dixon. 'So people feel like they're still paying a lot, and the quality is not there for what they're paying.' Grill'd recorded 88 per cent overall satisfaction among customers surveyed by Fonto between February and April 2025. Between March 2024-May 2024, Grill'd's overall satisfaction jumped from 85 per cent between to 88 per cent between February and April 2025. Over the same period, McDonald's dropped from 74 per cent to 69 per cent respectively. Despite the low customer satisfaction, 75 per cent of McDonald's customers told Fonto they didn't consider going elsewhere. Mr Dixon said one major reason behind this decision is proximity, with McDonald's owning over 1,000 restaurants across the country. 'If you're in a regional or rural area then it's hard to consider going somewhere else if there's nothing for a long way away,' he said. McDonald's over 1,000 restaurants across the country. Picture: Evan Morgan But as competitors open more stores the game could change. Last year, GYG announced its goal to expand its network to over 1,000 stores. 'The question that everyone probably needs to think about is, if every town had a strip, and in that strip was a McDonald's, a Hungry Jack's, a KFC and a Subway, would McDonald's hold the massive market there that it does?' Mr Dixon questioned. 'Or would people move between them because they don't want to eat a burger every night, or because the quality and the satisfaction is not necessarily as high in some of those restaurants?' The future of fast food in Australia New competitors such as US-based chicken chain Wingstop – which opened its first store in Australia this month – is also looking to take a bite out of an increasingly crowded market. 'McDonald's has stood the test of time in the Australian market, there is always the risk of losing market share to new competitors,' said Ms Jeswanth. 'International fast food giant Wendy's is set to expand to over 200 locations in Australia over the next decade, proving to be a direct competitor to Maccas.' To compete, Ms Jeswanth said brands will need to focus on providing premium quality and healthier meals at affordable prices. 'Consumer behaviour is tilting towards sustainable and healthier options, and fast food giants will need to match these preferences (including plant-based options) to remain viable in his highly competitive market,' she said. The fast food market is predicted to become more crowded in Australia. Picture: Glenn Campbell 'Despite McDonald's loyalty and scale within Australia, the brand will need to focus on bettering its offerings to remain competitive.' Mr Dixon agrees 'the competition will just get tougher'. 'If I was McDonald's or a McDonald's franchisee, I'd have my work ahead of me,' he said. 'They've got to think seriously about how they reinvent themselves again, or what they do differently to continue to dominate.' contacted McDonald's for comment but was referred to its first-quarter sales data. Originally published as McDonald's battles 'fierce' competition in Australia as global sales drop
