McDonald’s restaurant chain increases Profitability through digital sales

Digital sales help fast-food chain McDonald’s Corp. (MCD) restore sales and improve profitability in the face of the ongoing pandemic. Takeaway sales or online orders were the main drivers of McDonald’s growth in the past quarter, although traffic in restaurants is also returning. 

However, digital sales provide a high level of revenue and help reduce the risks associated with staffing deficiencies in the service sector against the background of COVID-19. According to McDonald’s, in the company’s six main markets, more than 20% of sales came from digital in the first three quarters of the fiscal year 2021. 

The company currently offers delivery from 32,000 of its restaurants in 100 countries. As a result, the network’s loyalty program coverage is increasing — it now has about 21 million users in the US and about 100 million in China, where it received the innovation especially warmly. 

In addition to attracting additional revenue, the digital channel reduces the staffing load in McDonald’s restaurants, especially important in the current conditions when it is difficult for a company to staff employees. 

The shortage is so evident that many restaurants operate on a reduced schedule. The company even decided to raise wages, but this did not attract employees either. The growth in the share of digital orders helps McDonald’s reduce the need for personnel. In the end, of course, it would help to increase Profitability. 

Not surprisingly, the company is targeting operating profit margins in the mid to low 40% range for fiscal years 2021 and 2022. would be a repeat of the success of 2018 and 2019. Thus, the built network of digital sales is one of the main guarantors of the success of the McDonald’s restaurant chain in the current conditions. 

Thanks to this innovation, the company increases sales and also improves the profit indicator. What did McDonald’s stock close at today October 29, the MCD stock was worth $245.55.