Check out this mcdvoice survey to win prizes.
McDonald’s (NYSE:MCD) wants to correct a customer traffic problem by spending $1.6 billion. It seems that the global growth rate is more than double that of the US home market with countries such as France and Australia showing 5.4% increases compared to the 2.4% increase at home. In fact, the average global growth rate is 4%, which is still significantly larger than the home figures.
The US markets customer traffic rates continue to drop, and that means the company has to find ways to improve accessibility to every aspect of the operation. Among the many changes being added are electronic kiosks where customers can order directly from an electronic menu as well as pay through a mobile device.
Another improvement was from remodeling its business model and moving away from property ownership, replacing it with income from franchisee rent, fees, and royalties the chains operating margins increased exponentially and are now above 40% compared to the below 30% before the change.
The new tax changes have also benefited the chain and together with the income generated by the operational changes combined with the $6 billion from stock repurchasing, explains the 15% boost to dividends in the fourth quarter of 2018.
Now its time to invest in improving the home market scene and this large injection of capital will go directly to logistics and customer satisfaction improvements all aimed at raising the growth margins to that of the rest of the world.
2019 is going to be a very interesting year for McDonald’s, so keep your eyes open on this stock, and watch how the improvement plans are put into place.