Bloomberg News

McDonald’s Testing Mobile Payment App as U.S. Sales Stumble (1)

September 10, 2013

McDonald’s Testing Mobile Payment App as U.S. Sales Stumble

After ordering via a mobile phone, customers can pick up food in stores, curbside or at drive-thru windows, according to notes from a June meeting of McDonald’s Corp. franchisees and company executives obtained by Bloomberg News. Photographer: Tim Boyle/Bloomberg

Americans will soon be able to order and pay for Big Macs from their mobile phones.

McDonald’s Corp. (MCD:US) is currently testing a mobile payment application in Salt Lake City and in Austin, Texas, Lisa McComb, a spokeswoman, said today in an e-mail.

McDonald’s, which today reported U.S. same-store sales that trailed estimates for August, is looking for ways to make it easier for diners to load up on Big Macs, McWraps and smoothies. It’s not alone in seeking to ignite growth at a time when many Americans are eating out less. Burger King Worldwide Inc. (BKW:US) offers a delivery service with a $10 minimum order in some U.S. cities, while Chipotle Mexican Grill Inc. (CMG:US) has a mobile ordering app.

“You have to look at the whole generation that’s coming up and I think we’re moving to a cashless society,” Bob Goldin, executive vice president at Chicago-based restaurant researcher Technomic Inc., said in an interview. Mobile apps appeal to millennials and teenagers, he said.

“It’s a worthwhile investment,” for McDonald’s, Goldin said.

After ordering via a mobile phone, customers can pick up food in stores, curbside or at drive-thru windows, according to notes from a June meeting of McDonald’s franchisees and company executives obtained by Bloomberg News. The system will also include special promotions, offers and a loyalty program.

“While many competitors are publicizing their efforts to get an initial foothold in the mobile arena, no one has developed a comprehensive solution that integrates all the opportunities this technology presents,” according to the notes.

McDonald’s, based in Oak Brook, Illinois, rose (MCD:US) 0.5 percent to $96.89 at the close in New York. The shares advanced (MCD:US) 9.8 percent this year, while the Standard & Poor’s 500 Index climbed 18 percent.

‘New Technologies’

“We’re always looking at new technologies to make the McDonald’s experience better for our customers,” McComb said. “We are testing some of these technologies in a few markets, so it’s premature to speculate on the decisions we may make after the tests, but we’re excited to bring a cutting-edge experience in the future to our customers.”

McDonald’s, which gets about one-third of revenue from domestic locations, is working to draw cash-strapped Americans with new products including steak breakfast biscuits, chicken wings and Quarter Pounders with different toppings and sauces.

The company already has a U.S. mobile phone app for customers to locate restaurants, find nutrition information and search for jobs that was introduced in 2011. The year before that, the chain began offering free Wi-Fi at its restaurants globally to encourage customers to stick around.

McDonald’s has about 34,700 locations worldwide, including more than 14,100 in the U.S.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net


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Companies Mentioned

  • MCD
    (McDonald's Corp)
    • $95.66 USD
    • 0.31
    • 0.32%
  • BKW
    (Burger King Worldwide Inc)
    • $26.54 USD
    • 0.09
    • 0.34%
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