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McDonald's to boost restaurant growth, streamline some programs

Published 01/06/2023, 03:33 PM
Updated 01/06/2023, 03:50 PM
© Reuters. A McDonald's restaurant is seen as McDonald's Corp. reports fourth quarter earnings, in Arlington, Virginia, U.S., January 27, 2022. REUTERS/Joshua Roberts

By Hilary Russ

NEW YORK (Reuters) -Burger chain McDonald's Corp (NYSE:MCD) said on Friday that it will review corporate staffing levels and aim to build more restaurants as part of an updated business strategy.

The new plan, announced in a letter from Chief Executive Officer Chris Kempczinski to global employees and seen by Reuters, calls for the Chicago-based company to cancel or "de-prioritize" some initiatives while also accelerating store development.

That could lead to layoffs in some areas and expansion in others, the company said.

"We will look to our strategy and our values to guide how we reach those decisions and support every impacted member of the company," the letter said, adding that McDonald's will begin announcing key decisions by April 3.

McDonald's beat sales and profit estimates in its last quarterly earnings results in October, helped by higher menu prices and increased foot traffic from inflation-weary customers looking for value meals. Its global same-store sales increased 9.5% in the third quarter.

Like other fast-food chains, McDonald's has hiked menu prices to keep up with surging commodity and labor costs.

McDonald's strong sales and profits also mean that it - like several other restaurant chains including Starbucks Corp (NASDAQ:SBUX) and Chipotle Mexican Grill Inc (NYSE:CMG) - can embark on big expansion plans. McDonald's did not provide numbers for how many new stores the company wants to build.

© Reuters. A McDonald's restaurant is seen as McDonald's Corp. reports fourth quarter earnings, in Arlington, Virginia, U.S., January 27, 2022. REUTERS/Joshua Roberts

It now also plans to streamline technology - including its loyalty programs - and menu development in order to get new products into use globally more quickly.

Kempczinski also promoted several executives and created a new chief transformation officer role, his letter said.

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