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McDonald's has set ambitious targets for its expansion and growth, aiming to open more than 8,800 new locations and add 100 million members to its loyalty program by 2027. These goals are part of the company's long-term strategy to increase sales across its extensive restaurant network. The fast-food chain plans to disclose more details during its investor day, focusing on attracting customers through menu improvements and a strong emphasis on chicken products.
For 2024, McDonald's projects a 2% constant currency systemwide sales growth and a 4% net new restaurant growth. Beyond 2024, the company is targeting 2.5% systemwide sales growth in constant currency and plans to increase its restaurant count by 4% to 5%. This aggressive expansion plan will lead to higher capital spending, with an anticipated $2.5 billion in capital expenditures for 2024, and further increases in capital expenditures from 2025 through 2027.
McDonald's aims to have 50,000 global locations by 2027, with a focus on expanding in the U.S. and internationally operated markets such as France, Canada, and Australia. The company recognizes that its current restaurant footprint does not effectively represent consumers' current living patterns, especially the shift to the South and Southeast in the U.S. As part of its broader corporate restructuring, the CEO announced plans to accelerate new restaurant development, marking the first time the company has disclosed such ambitious development targets.
In addition to its expansion plans, McDonald's seeks to have a quarter of a billion active members in its loyalty program by 2027. The loyalty program has already proven successful in boosting mobile sales and promoting customer retention. Moreover, McDonald's has revealed a partnership with Google Cloud, utilizing its artificial intelligence to enhance operations across its restaurants. Alphabet CEO Sundar Pichai expressed excitement about this collaborative effort to improve the dining experience for McDonald's employees and customers worldwide.
What is CosMc’s? McDonald’s shares first details about its new beverage-led store
CosMc’s has no dining room and no Big Macs. But it does have plenty of drinks and a whopping four-lane drive-through.
After a week of growing hype and fuzzy shots posted on X, McDonald’s has announced the launch of CosMc’s. Located in the Chicago southwest suburb of Bolingbrook, it’s a spinoff “concept” from the famed burger chain that focuses on drinks and snacks.
At this small store, there will be no french fries, no burgers, and no seats or dining room. Instead, expect boba (bubble tea), breakfast sandwiches, and a whopping four-lane drive-through. But most of all, know that nothing you see here is final. According to the company, this first CosMc’s is a learning lab, a test bed for the refinement of just about every idea as it plans to open 10 more pilot locations in Texas before the end of the year. Even this first location probably won’t be architected like others to come; it’s a retrofit of an old Boston Market.
Whereas McDonald’s is best known for a menu of food and meals, the CosMc’s “otherwordly” menu is “designed to boost your mood into the stratosphere, if only for a few moments,” according to the press release. It’s “snackier” than traditional fast food; more like Starbucks, Dunkin’, or the rapidly growing Oregon-based coffee chain, Dutch Bros.
“There’s definitely a rush right now toward [the beverage] space,” notes Danny Klein, editorial director of the trade publication QSR magazine. Coffee with light, often sweet, bites has been a winning formula for restaurant chains in recent years. He points out that Starbucks added more locations last year (429) in the U.S. than any other chain, followed by the coffee-less Crumbl cookies (363). Dutch Bros. also neared the top of the list with an additional 133 stores.
Beyond coffee, CosMc’s inclusion of boba is notable on top of more Starbucks-adjacent, customizable coffee and fruit drinks. The boba market is growing, although how much is unclear—one estimate shows U.S. boba consumption tripling between 2021 and 2028, while another global estimate points to $1 billion in growth by 2027. Food offerings include brioche egg sandwiches (available all day), McPops-filled doughnut bites, pretzel bites, cookies, and other baked goods. (Notably, McDonald’s is also offering McMuffins and an M&M’s McFlurry.)
The pared-back menu, at least compared to a typical McDonald’s, likely eliminates the need for significant pieces of equipment, which coupled with no seating area, significantly reduces store footprints, build-out costs, and operational complexity. It’s easy to see how the CosMc’s tiny store strategy mirrors the small-store rollout that Starbucks introduced in 2012, in which it eliminated most or all seating to prioritize serving walk-up and drive-through customers with minimal real estate footprint.
As for the name, CosMc’s—that’s inspired by a seldom-used alien mascot that McDonald’s introduced in 1987, though the brand comes to life with hints of retro-futurism that predates the ’80s. McDonald’s has reintroduced a Googie-style design from its earliest midcentury stores. But it’s hardly just a 1950s McDonald’s all over again. For the logo, I’d thought McDonald’s had swapped out its typical red for purple (and CosMc’s glistens almost like the wet drips of a Grimace shake). In fact, McDonald’s calls this color “CosMc’s Blue,” and it certainly reads more blue on the building set away from so much yellow. For the store sign, CosMc features just one-half of the golden arches tilted like the tail of an emoji shooting star.
My interpretation of the concept: If McDonald’s is your parent—“Finish your milk and eat those apple slices with the Happy Meal!”—then CosMc’s has arrived like your fun-loving aunt—“Who wants to drink a rainbow?!?”
Time will tell how the new restaurant concept shapes up, but “from a marketing standpoint, it’s just been amazing,” notes Klein. He points to a franchisee on X calling this the biggest “thing” for the McDonald’s brand since the company invested in Chipotle, and it’s hard to argue with that. Even if CosMc’s remains small, its boost for the fresh McDonald’s brand already seems significant.
McDonald’s is opening the first location of its new spinoff brand CosMc’s this week. What's on the menu? https://t.co/oc6Hmsl4W4 pic.twitter.com/7jDHTFNFNP
— CNBC (@CNBC) December 7, 2023