McDonald’s Delivery and Digital platforms are projected to be new growth drivers for the next 3 years. With the expansion of the McDelivery service network and collaborations with partners, McDonald’s Malaysia expects an increase in revenue contribution from the McDelivery segment.
“2018 has been a winning year for us at McDonald’s Malaysia, during which we recorded our highest sales performance ever, backed by investments of more than RM200 million over the past two years. The strong numbers are a reflection that although we have grown from strength to strength over the years, we have never wavered from the strong foundation that we are built upon, which is running great restaurants and providing great value to consumers,” said Azmir Jaafar, Managing Director and Local Operating Partner of McDonald’s Malaysia.
“We are also currently the leading quick-service restaurant brand in terms of market share in the Informal Eating Out (IEO) space,” added Azmir.
Modernising the Customer Restaurant Experience Through EOTF
One of the contributing factors in the improved performance at existing outlets is the modernisation of the customer restaurant experience, or Experience of the Future (EOTF). This new dining model includes features and innovative customer service concepts such as:-
- Table service, where customers can order their meals at the front counter or via one of the ordering screens and choose the option for their food to be served by a McDonald’s Guest Experience Leader (GEL) at their table
- Self-ordering kiosks (SOKs), where customers can place their own orders and customise their meals according to their preference.
- Dual point service that enables customers to order through the SOKs or the front counter, before picking up their food when their order numbers are flashed on screen.
- Cashless transaction convenience so that customers can easily pay for their meals using credit or debit cards.
- Digital menu boards to showcase the menu and on-going promotions, and improve customer experience when ordering over the counter.
- High speed WiFi connectivity for the benefit of always-connected customers.
In December 2016, Saudi Arabia’s Lionhorn Pte Ltd bought over the rights to McDonald’s Malaysia and Singapore as the Developmental Licensee (DL). Since then, McDonald’s Malaysia has opened 23 new stores and remodelled 64 of its existing restaurants to be EOTF-ready. It currently has 278 restaurants nationwide.
“The next few years are going to be an exciting time for us. By 2025, we are planning to invest RM1.4 billion, and have a footprint of up to 450 restaurants nationwide,” added Azmir.
Commitment to Super Convenience via Drive-Thru
As part of its continuous emphasis on providing super convenience to its customers, McDonald’s Malaysia is placing focus on speed and accuracy by ramping up its Drive-Thru business segment.
As McDonald’s continues to expand its footprint nationwide, the Drive-Thru business has become a critical component of its business strategy to elevate McDonald’s market leadership and keep its promise of delivering delicious feel-good moments to loyal customers anytime, anywhere.
In the past two years, the company opened 17 new Drive-Thru restaurants, and is targeting to open 20 more in 2019 to complement its existing 167 Drive-Thru restaurants. Currently, Drive-Thru window sales contribute close to 50 percent of total sales for all McDonald’s Drive-Thru restaurants. Additionally, the company is seeing an average of 10 percent year-on-year growth in its Drive-Thru sales for the first quarter of 2019.
Building Stronger Connections with the Community
According to Azmir, major successes are not merely reflected in a robust bottom line, but also through the human connections built along the way.
“At McDonald’s Malaysia, we take pride in engaging and giving back to the community. This commitment is a core value of McDonald’s Malaysia, as the company consistently strives to reach out to communities in the country. There were in fact, 10,000 community engagements held in 2018 alone,” said Azmir.
“Other than activities with our local communities; stakeholder engagements with city councils, religious authorities, and government bodies have also contributed to our strong and encouraging consumer and community metrics,” added Azmir.
For instance, the third edition of Anugerah Guru Inspirasi McDonald’s, which honours teachers who have gone beyond the call of duty in nurturing their students, saw resounding success this year, with over 7,500 nominations submitted from the public this year. This was a significant increase compared to the 3,000 submissions in 2018.
Another initiative close to McDonald’s heart is the ‘Back-to-School’ programme, which has benefitted 23,000 urban poor primary school children since 2017. This year’s edition is set to be the biggest, with the aim of reaching out to 30,000 school children all over Malaysia.
Through the Ronald McDonald House Charities (RMHC), McDonald’s has regularly carried out multiple programmes with aid and assistance from the public. Funds collected for the construction of the second Ronald McDonald House in Kelantan, which is slated to be opened soon, amounted to more than RM4 million.
Plans and Growth Drivers
McDonald’s Delivery and Digital platforms are also projected to be new growth drivers for the next 3 years.
“Our delivery service is a key business accelerator for McDonald’s Malaysia. Our target for 2019 is to increase the number of our delivery hubs to 600 and expand the number to 1,000 in the next 3 years,” said Azmir.
With the expansion of the McDelivery service network and collaborations with partners, McDonald’s Malaysia expects an increase in revenue contribution from the McDelivery segment. In 2018, the McDelivery service segment recorded a 92 percent year-on-year revenue growth.
As of the first quarter of 2019, the McDonald’s app - which can be downloaded on both the Apple App store and Google Play store – has seen more than 3.7 million downloads, out of which 2.9 million are registered users and 1.5 million are active users. Customer value propositions in the app include latest news and promotions, targeted offers, Order McDelivery, customer feedback, and store locator.
In terms of sustainability initiatives, McDonald’s is committed to have more restaurants equipped with green features in order to achieve its target of reducing carbon emission in each restaurant by up to 30 percent.
On the talent front, McDonald’s Malaysia currently employs more than 14,000 Malaysians in restaurants across the country.
“With the company expanding its footprint in the coming years, we are expecting to create 10,000 additional jobs by 2025,” said Azmir.
“We look forward to enhance the current talent pipeline that we have now. By doing so, we are ensuring that we provide the opportunity to young people to kickstart their careers and grow in various areas within the McDonald’s Malaysia organisation,” added Azmir.