There were hundreds last week in the car queue, sometimes for hours in front of “McDos” just reopened in France and elsewhere. It is on this taste “for well-known brands and familiar routines” that the fast food giant is counting to start afresh after the Covid-19 pandemic, which caused world turnover to drop in March. more than 22%.
In France, reopenings are beginning to materialize beyond the Paris region as in Brittany, but also in New Aquitaine (in the Basque Country, in La Rochelle, in Dax, in Charente…) with signs that only work ‘with take-out.
As reported in an article in Le Monde, some fast food workers are still reluctant to resume before May 11. “We gave a negative opinion in three of the four McDonald’s subsidiaries in Ile-de-France. We think these openings are premature and that we have to wait until May 11, “said Lyes Abdi, FO central delegate, McDonald’s Ile-de-France.
Other fast food stores such as KFC, have also started to open with takeaway, this is the case in Bordeaux.
>> Read also: Video. The reopening of a McDonald’s causes a traffic jam in Seine-et-Marne
Traffic jams in France
Talking about the lines in France and Austria, Chris Kempczinski, the managing director of Mc Donald’s, was optimistic about the recovery, during a conference call with analysts detailing the results of the first quarter. “This desire to find a familiar taste, to turn to well-known brands is very very powerful,” he said, adding that the practical and inexpensive aspect will also weigh heavily on the balance of consumers at the reopening.
The reopening of the Mcdo de Lieusaint-Moissy #mcdo pic.twitter.com/52keTxeLhD
– Kid Cat Burglar (@ 127_la_ville) April 20, 2020
But if he is optimistic in the longer term, the recovery will not be immediate, warned Chris Kempczinski. “We expect the second quarter as a whole to be significantly worse than what we saw in March in terms of sales on a like-for-like basis,” he said.
Like the rest of the restaurant industry almost worldwide, McDonald’s has been hit hard by the Covid-19 pandemic and has been forced to close a number of its 40,000 restaurants worldwide or at the very least. ” set up menus and opening hours, and be limited to delivery, take-out and drive, drive-thru.
The group’s share was down some 2.3% at 4:15 p.m. Thursday after announcing earnings per share of $ 1.47 in the 1st quarter, 10 cents below Wall Street expectations, but better than expected sales at 4.17 billion dollars. This is a 5% drop from the same period in 2019 by eliminating currency fluctuations. The year had started well and in January-February, sales on a like-for-like basis increased by more than 7% before falling in March when the new coronavirus spread everywhere.
What strategy for recovery? Masks and drive
Chris Kempczinski detailed what he thought made his group more resilient than others. For example, lessons learned in China about protecting employees and customers – such as contactless delivery – have been “quickly shared around the world”. “The size and scale of our supply chain has also been shown to be important,” said the CEO, saying that he has seen no interruption in supply.
In the United States, 99% of restaurants remained open … only 45% in Europe
The group was also able to buy 120 million masks to equip the employees of the chain, a proof of its striking force when this product proved to be very rare in many countries. However, employees protested working conditions and the lack of health coverage, in the United States for example. “McDonald’s has been through a lot for 65 years and I am confident that the measures we are taking will enable us to emerge from this crisis in a position of strength in terms of competitiveness,” said the director general. However, the group had warned in early April that it would give up making precise forecasts on its performance for the whole financial year.
In the United States, McDonald’s largest market, 99% of the restaurants are open but mostly still operate in home delivery, takeout and drive mode. It is through the drive that the group achieves 90% of its sales in the country against around two thirds before the crisis. McDonald’s has seen improvement in recent weeks and expects sales to drop 20% in April compared to around 25% in March.
The proportion of stores open in one form or another drops to 45% in Europe, Russia, and Canada and Australia. They are 99% in China. On the other hand, the brand with the golden arch notes that customers are slow to resume their habits before the crisis.
So, where business picks up in the United States, the breakfast offer is less popular, customers are even more sensitive to promotions and turn instead to the classics on the menu. Weekends are also shunned. The group’s chief financial officer, Kevin Ozan, highlighted the help the group is providing to franchisees to help them cope with the crisis, particularly in terms of deferred payment of rents or royalties.
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