Connect with us

BizNews

Strong finish in Q1: McDonald’s Philippines poised for full recovery in 2022

In the first quarter of the year, McDonald’s Philippines achieved double-digit sales growth of 29% versus the same period last year driven by strong same store sales growth of 22%. 

Published

on

With the Philippine economy in an upward trend, quick service restaurant giant Golden Arches Development Corporation (McDonald’s Philippines), majority owned, and operated by McDonald’s Master Franchise Holder, Dr. George T. Yang (Chairman & Founder) and Kenneth Yang (President & CEO), is poised for sustained growth and recovery in 2022.

Coming into 2022, McDonald’s remained resilient and sustained its recovery momentum in the first quarter of the year despite the Omicron surge in January.  It continued its commitment of being a trusted partner of the Filipino community with its safe, quality food, innovative services, focus on supporting its employees and communities in need, and being a partner of the government in navigating through the pandemic. 

“We’ve overcome the challenges of the past 2 years because of strategic investments on innovations we made before the pandemic, which enabled us to serve a safe and frictionless omni-channel experience for our customers. We are confident that this will continue to drive our growth in 2022,” says President & CEO Kenneth Yang. 

In the first quarter of the year, McDonald’s Philippines achieved double-digit sales growth of 29% versus the same period last year driven by strong same store sales growth of 22%. 

The company has also achieved 100% of its sales recovery plan versus 2019. 

“With the ease of restrictions that enabled consumer mobility and confidence, we’re very happy to welcome back more of our customers in our stores.” Yang added. Dine-in sales experienced a double-digit increase from February to March of this year and continued to pick up in April as more areas shifted to lower Alert Levels and election campaigns were in full swing.

YTD March, drive-thru and delivery continued its strong performance both experiencing double-digit growth in sales and guest counts. 

Growth across all channels is enabled by the company’s initiative to roll-out cashless solutions. To date, 86% of its store base are equipped with cashless. 

Robust momentum towards growth

McDonald’s kept its focus on improving the quality and safety of its food and service across all customer channels. It was underscored with initiatives that the company implemented in support of its employees, owner operators and partners. 

To ensure safe restaurant operations throughout the pandemic, McDonald’s launched the M Safe program in 2020. According to the company, the principle of M Safe is that if their employees are safe, they will keep customers safe.  

Aside from compliance with all government mandated health and safety protocols, McDonald’s rolled out its employee vaccination program with education initiatives and providing access to the vaccines. 100% of its crew and managers have been fully vaccinated, while 70% of NCR employees and 50% of employees outside NCR have already been boosted. 

“Nothing is more important to us than people—our customers, our crew, and managers. It is an imperative to have safety programs in place consistently. Keeping our people safe allows us to serve a better customer experience,” said Yang. 

McDonald’s has also remained a committed partner in creating a positive difference in communities where they operate.  

McDonald’s Philippines through its charity of choice, supports Ronald McDonald House Charities Philippines’ (RMHC) Kindness Kitchen initiative. The Kindness Kitchen began in 2020 where the charity served McDonald’s meals to frontliners and indigent communities. It has served over 700,000 hot meals and continues to do so today.

The company has also been an active partner of the government in navigating the pandemic through a private and public consortium, Task Force T3. It provided support to its Ingat Angat campaigns that aimed to drive awareness on health and safety protocols, importance of vaccination, and building consumer confidence as the country transitions into COVID-19 as an endemic.  

Furthermore, McDonald’s takes a step in doing better for the environment with sustainable restaurant innovations through its Green & Good platform. The company opened its first full Green & Good store in the country in 2021, a store designed using green construction and utility efficient solutions with bike-friendly features to meet the needs of cyclists like a Bike & Dine space and a Bike Repair Station. 

The company is set to open more new stores this year that are equipped with Green & Good solutions like solar rooftops, and grid-tied solar photovoltaic (PV) systems, which are both cost-effective and efficient in the reduction of emissions. 

Another environmentally sustainable initiative McDonald’s Philippines has introduced this year is its use of strawless lids. The strawless lids allow for less waste to be consumed for its iced drinks.

The McDonald’s Flagship Green and Good Store in Mandaluyong is the first McDonald’s store in the country designed using green construction and utility efficient solutions with bike-friendly features to meet the needs of cyclists.

All set for a strong sustainable recovery

McDonald’s ended 2021 with a 671-store base, opening 36 new stores. With every new McDonald’s store that opens, the company provides employment opportunities with its direct hiring practice, which has been in place since 1981. With direct hiring, even part-time students are given equal opportunities because of a flexible work schedule, allowing them to fulfill their academic requirements while earning. 

“With over 40,000 employees systemwide, we will remain committed to working with different stakeholders for our shared goal of the country’s full economic recovery. As McDonald’s continues its growth path in 2022, we will be steadfast in our pursuit of sustainable development, employment and community building with even more vigor,” concludes Mr. Yang. 

BizNews

Sticking with old technology can be a strategic move

As competitors adopt new technology in some markets, firms that stick with the old technology may experience an initial decline before actually rebounding and even reaching new heights.

Published

on

Technological innovation — especially disruptive innovation — is often heralded as the best strategy for a company. But new research published in Strategic Management Journal found that as competitors adopt new technology in some markets, firms that stick with the old technology may experience an initial decline before actually rebounding and even reaching new heights. While the rise of a discontinuous technology does pose a substitute threat to the old technology, it also further exposes niche segments where companies can gain a foothold with customers who favor the old technology.

The analysis by Xu Li, a professor at the London School of Economics and Political Science, used archival data from the traditional Chinese medicine industry in China during the 1990s. In his interviews with managers in the field, he found that some chose not to innovate along with their competitors. In many cases, Li found these companies were performing well, if not sometimes better, by not making changes. Inspired by these conversations, Li chose to study under what conditions a firm may benefit from not innovating.

Li found some prior research on why companies would stick with older technology, but none explored why — during times of disruptive change in the market — sometimes firms are able to survive and even perform better within a small niche with old technology. What Li’s paper showed was that adhering to the old technology can, in some cases, be an effective strategy that ultimately improves firm performance.

The data showed a U-curve effect for traditional Chinese medicine firms that chose not to adopt new technology: The decline in performance began as a few competitors started launching a new technology, but later recovered and reached new heights as most competitors had adopted the new technology and exited the old technology market. But a lack of competition within the niche group of consumers who prefer older technology essentially gave these firms a monopoly within a smaller market as fewer competitors remained.

“Even though the new technology is often superior in terms of functionality, it doesn’t mean that every single customer or customer segment will be willing to move to the new technology,” Li says. “It’s important to understand what customers like about your product. We tend to assume that if a firm introduces something new, then customers must appreciate the new thing or the newness of the offering. But that’s not always true. The emergence of new technology can actually reveal people’s preference for something older.”

The research also refutes the idea that when the market is small, a company won’t perform better — but that depends on how many firms are still serving this niche. If only a few firms are left to serve this market, a company has far more power to charge higher prices among loyal customers with few other options.

“When you see a firm that is not actively innovating, we tend to believe the firm must be either incapable or is suffering — it’s always a bit of a negative tone,” Li says. “Sometimes staying with old technology might actually be a strategic choice, because by doing so it might also lead to better performance.”

Continue Reading

BizNews

Customers prefer text over video to provide service feedback

More people indicated they would likely leave written compliments or complaints about service on a restaurant-provided tablet powered by artificial intelligence. A video message option appeared to discourage leaving feedback.

Published

on

At a time when one viral video can damage a business, some companies are turning to their own commenting platforms rather than letting social media be the main outlet for customer feedback. Only one wrinkle: in this context, customers appear to prefer writing a message rather than leaving a video.

In a recent study, more participants indicated they would likely leave written compliments or complaints about service on a restaurant-provided tablet powered by artificial intelligence. A video message option appeared to discourage leaving feedback.

With more restaurants and hotels turning to AI to enhance their service, the findings indicate that methods that require “low self-disclosure” would work better, meaning ones that don’t require customers to provide very much identifiable information.

“Some restaurants and hotels actually ask customers to create video testimonials that they can share, but for general customers, it seems they feel more comfortable with low self-disclosure. This is probably because people still do not trust AI to that level,” said lead author Ruiying Cai, a researcher in Washington State University’s Carson College of Business.

With a lot of hype around AI technology, many people have misperceptions about what it can do, Cai pointed out, perhaps believing it is capable of a lot more than simply recording a message.

The study participants reported being concerned about what would be done with their information in all the scenarios, but this was heightened with the option to leave a video.

For the study, published in the International Journal of Hospitality Management, Cai and her colleagues presented different online scenarios to a total of 439 people. The participants were first asked to imagine a restaurant where they had either good or bad service. Then they reported how willing they were to give the server compliments, or complaints, with either text or video on an AI-enabled tablet.

The researchers found that the participants were more willing to give feedback using text, whether positive or negative.

The scenarios also had participants receiving a theoretical immediate or delayed reward to provide feedback, namely a 5% discount of their current meal or a future one. For complaints, the reward timing did not appear to make much difference, which the authors said was not surprising as people tend to be more highly motivated to complain than compliment.

For compliments, the researchers found an interesting connection: with more participants choosing the delayed reward over the immediate one. This may indicate that giving the compliment itself is its own reward as it makes the giver feel good, Cai said.

“It’s a good start to think about how to encourage customers to leave more compliments which could be very important for frontline employees. It could also be beneficial for the customers themselves,” she said.

Even complaints are important to encourage, Cai added. As her previous research suggests, restaurants and hotels should make it easier for customers to complain to them directly rather than go elsewhere to air their grievances.

“There have been episodes when customers were not afraid of posting angry videos on their own social media,” Cai said. “If restaurants and hotels can encourage customers to complain directly to them, then they may be able to recover and solve that service failure before it goes viral online.”

Continue Reading

BizNews

Ambitious workers park the office politics when employer is struggling, study suggests

Workers curb competition against competitors to unite against external rivals when employer faces either losing sector status or can improve reputation.

Published

on

Workers curb competition against competitors to unite against external rivals when employer faces either losing sector status or can improve reputation.

This is according to a study – “Revving Up or Backing Down? Cross-Level Effects of Firm-Level Tournaments on Employees’ Competitive Actions” by Patrick Hallila, Hans T. W. Frankort and Paolo Aversa – that appeared in the Academy of Management Journal.

The peer reviewed paper, which has been published on the website of the Academy of Management Journal, looked at riders who, systematically, adjusted their internal and external overtakes based on their team’s competitive threats and opportunities, as well as the resources available to those competitor teams.

“Sports – particularly motorsports – can be a good proxy for several other industries as they are extremely competitive: if you don’t perform and progress you may be out. Workers in sectors such as consultancy and financial services face similar pressures,” Frankort said.

This study linked the motorsports experience to other workplaces, particularly since earlier research has shown that employees compete to improve their relative standing in the eyes of their employer, in the hope of climbing the career ladder. Such behaviors may include poaching colleagues’ clients or even disrupting or sabotaging their work.

And yet this study suggests that ambitious workers tend to modify those behaviors when the standing of their organization is about to deteriorate or improve.

“Why? Because they see the standing of their firm as an important factor in deciding who to compete with to advance their career,” Frankort said.

“If the company has a chance to out-perform better-resourced rivals, employees’ workplace behaviour is geared towards being seen to be a key contributor to that success. For example, a salesperson might try to poach colleagues’ clients. However, if a firm is facing threats, such as losing market share to smaller rivals, workers may feel that infighting is poor form. Instead, they would focus on competing against rival firms. Inside the firm, individuals may simply want to blend into the background when their company is going through difficult times.”

The findings suggest, Frankort said, that employers can influence the nature of their employees’ competitive actions. For example, employers could highlight threats to the firm from underdog firms or its opportunities against bigger rivals.

The research also found that riders’ overtaking attempts were shaped by their contractual position with the team. For example, replacement riders – the MotoGP equivalent of agency workers – attempt more overtakes against teammates when the team is doing well and against all riders when the team is struggling.

The paper concluded: “It may be that replacement riders are keen to signal their skills relative to incumbents, hoping to secure a permanent contract.”

Riders whose contracts will not be renewed challenge their teammates on the track and are less likely to overtake riders from other teams – suggesting they feel detached from the team and even disgruntled with it.

Continue Reading
Advertisement
Advertisement

Like us on Facebook

Trending