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BuckheadFunds > Startups > McDonald’s Teases New Restaurant Concept In Q2 Earnings Call

McDonald’s Teases New Restaurant Concept In Q2 Earnings Call

News Room By News Room August 8, 2023 4 Min Read
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Ronald McDonald was the most instantly recognisable mascot of the burger franchise giant McDonald’s since his introduction in 1963, although he’s been nudged into retirement in recent years. And now it looks as if the fast-food brand is handing the spotlight over to another much lesser-known character, CosMc, a yellow alien mascot first introduced to customers in the 1980s. Part alien, part robot, CosMc flies around in his space suit which also doubles up as a space ship, and appeared in a large number of McDonald’s adverts, both on TV and in print, in the period between 1986 and 1992.

Last month, in McDonald’s second quarter earnings call to investors, President and Chief Executive Officer, Chris Kempczinski revealed that their new business ventures team was in the process of developing a new restaurant concept, CosMc’s, named after the McDonaldland alien character.

At present, not much information is available about what this new restaurant concept might entail, save that it is a “small format concept” and will be launched in a small number of test locations in early 2024. This is in line with McDonald’s continued move towards developing more smaller and streamlined locations, such as the fully automated and take-out only site opened in Fort Worth at the end of 2022. It’s all part of the franchise giant’s “Accelerating the Arches” growth strategy announced in 2020, which included a commitment to meeting changing customer trends and needs as well as accelerating innovation and investment in technology and digital offerings.

Post pandemic, many fast food restaurant brands have shifted towards smaller footprint locations as they acknowledge that customer preferences for drive-thru, carry-out and third party delivery options seem to be here to stay. Shrinking the physical size of operations naturally leads to a reduction in operating costs, so helping franchisees to remain as profitable as possible.

And whilst it’s widely expected that the CosMc’s launch will be in line with this forward thinking strategy and is highly likely to embrace some future-facing technology which would tie in well with the character theming, it’s also a nod to nostalgia – something that has worked well for the McDonald’s franchise brand in recent times. The launch of Happy Meals for adults as a time limited initiative in 2022 was a big hit, in fact so much so that the chain had to put a stop to sales earlier than planned after such huge demand meant that they sold out of both boxes and toys. And earlier this year they brought back Grimace, a purple monster character who was relaunched in June 2023 for his 52nd birthday, with a purple shake and a Birthday Meal named in his honour. That again was a huge success with Ian Borden, McDonald’s Chief Financial Officer, reporting during the Q2 Earnings Call that the Grimace campaign had become “one of our most socially engaging campaigns of all time with millions of reactions on our social media posts, a true demonstration of how the power of our brand emerges in organic and creative ways in our fans. It contributed to the strong double digit comparable sales growth for the quarter in the US.”

More information about the CosMc’s restaurants is expected to be delivered at McDonald’s Investor Day at the end of the year. In the meantime, the fast-food franchise giant will be hoping that another nostalgic character revival combined with a new innovative concept will quickly become a soaring success for both the brand and for their franchise network.

Read the full article here

News Room August 8, 2023 August 8, 2023
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