Of all the big companies that I've been watching and reporting on during the coronavirus pandemic, McDonald's might be the most interesting -- and maybe the luckiest.
McDonald's has changed radically how it operates, but it has also been in a better position than many other retailers, simply because so much of its business already came from drive-through customers.
In fact, McDonald's spent $300 million on a tech acquisition to create the so-called drive-through of the future just last year. Good timing, if you ask me.
Now, however, we come to a point at which McDonald's is facing the same issue that so many of its competitors are facing -- in virtually every retail or customer-facing business.
So let's see if McDonald's luck still holds up. There were two big, consequential announcements Friday:
First, McDonald's joined the list of other big U.S. companies that will ask customers to wear masks to prevent the spread of coronavirus, at every single store in the country -- even where they are not required by local law.
Second, McDonald's announced that it will pause reopening dining rooms for another 30 days.
Let's take the second announcement first, as it might be more consequential. In June, McDonald's announced some great news: a plan to hire 260,000 new workers at McDonald's restaurants across the country.
But, those workers were supposed to be coming aboard to help open dining rooms that had been shuttered due to the coronavirus pandemic. And earlier this month, due to the worsening situation, McDonald's said it was delaying its plans until the end of July.
Now, it looks like it will be the end of August before those reopenings -- and the impact of those new jobs, which could single-handedly change the unemployment rate if they all came through at once.
That's unlucky for the new employees, and for McDonald's as a whole. But it's tempered once again by the fact that so much of McDonald's revenue came from drive-throughs, which aren't affected.
Then, there's the McDonald's mask announcement. It's interesting to note the exact wording in the McDonald's statement on the change:
"In order to protect the safety of our employees and customers, we will ask all customers to wear face coverings when entering our US restaurants effective August 1."
I think "ask" is the operative word. Dig deeper into the statement, and McDonald's says that "in those situations where a customer declines to wear a face covering, we'll put in place additional procedures to take care of them in a friendly, expedited way."
The policy suggests caution about putting low-paid employees in a position to try to enforce a restriction on its customers. However, McDonald's even benefits in terms of its mask announcement, because it applies only inside restaurants.
Again, many McDonald's are closed for dine-in service and the date on which they will reopen keeps getting pushed back, meaning that even more than before, McDonald's is primarily a drive-through business -- and the masks edict isn't really an issue at the drive-through.
I should mention a third announcement McDonald's made Friday: adding protective panels and barriers to at least some restaurants. But given the delay in reopening so much inside dining, it seems less consequential for the moment.
The great French chemist and inventor Louis Pasteur is credited with having coined the phrase: "Chance favors the prepared mind."
I hope it's not too much of a stretch to say that in the case of McDonald's, the coronavirus, and the company's focus on drive-throughs as the most efficient part of its business, luck favors the prepared company as well.
I'm pretty sure there's a lesson in there for your business.
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July 25, 2020 at 11:22AM
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McDonald's Just Made a Big Announcement. Is It Smart or Just Lucky? - Inc.
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