January 16, 2023
Two brothers named Richard and Maurice opened a barbeque restaurant in San Bernadino, Calif. in 1940. After a few years in business, they swapped the menu for burgers, shakes, chips and pie.
When the pair bought a few shake mixers from salesman Ray Kroc, the food world fundamentally changed. Kroc was fascinated by the restaurant that was able to serve customers quickly and consistently, so he purchased franchise rights from Dick and Mac McDonald and started adding restaurants. McDonald’s (Tii:MCD) was born.
While there’s a lot more to the story, the company would go on to codify fast food, invent the Speedee Service System and its 15 cent hamburgers and literally change the way the world eats.
Kroc’s vision was that there would be 1,000 McDonald’s restaurants solely in the United States, according to the company. Yet, McDonald’s continued to grow and expand into international markets beginning in 1967 opening in Canada and Puerto Rico. Today, the company has over 36,000 restaurants in over 100 nations – the most recent opening in Kazakhstan in 2016.
McDonald’s is as popular with retail shareholders as it is with those looking for a tasty and quick meal. McDonald's initial public offering was April 21, 1965 and since going public the company has executed 12 stock splits. An investment of $100 in the IPO, which would have bought 4.4 shares based on the price of $22.50 would be $862,600, which includes stock splits, but not dividends (McDonald’s has paid increasing dividends since its IPO).
While the company is ubiquitous around the world, it is not resting on past success. McDonald’s has a new leadership team that earlier this month updated its Accelerating the Arches 2.0 strategy. The plan calls for growth based on M-C-D, an idea based on maximixing marketing, committing to its core products and doubling down on the four Ds of delivery, digital, drive-thru and development.
“As we begin 2023 from a position of strength, we cannot stand still,” said Chris Kempczinski, president and chief executive officer in a global message to employees sent Jan. 6. “As Ray Kroc used to say, ‘If you’re not green and growing, you’re ripe and rotting.’ Fortunately, there remains so much growth potential within our ‘M-C-D’ pillars,” he said.
McDonald’s was a company built on burgers, but it announced that chicken would take a more prominent role on the menu. It also plans to improve classics like the Big Mac, Chicken McNuggets and french fries. In Italy, the company said it saw success with a Big Mac Event featuring a Chicken Big Mac and a Bacon Big Mac.
The three D’s – digital, delivery and drive-thru will continue to be a focus in 2023. Digital orders now represent more than one-third of its sales in its top six markets, according to the company. McDonald’s said it aims to be the global leader in food delivery. Digital sales are being fueled by more than 43 million active customers on its app in Q3. Delivery is now in nearly 100 countries and its loyalty program is now found in more than 50 markets around the world, which the company said is driving growth and exceeding expectations. A new testing concept recently was developed for the order-ahead lane at a McDonald’s in Fort Worth, Texas.
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