McDonald’s Success Looking A Customer Ahead with CosMc’s

 

McDonald’s, the fast-food behemoth, has a rich history of investing in other restaurant chains.  In the late 1990’s, as regular readers of this blog know, McDonald’s bought Donato’s Pizza, Boston Market, and a stake in fledging Chipotle Mexican Grill. 

However less than a decade later, McDonald’s divested from all three chains, which had become distractions as McDonald’s struggled.  At least that was the company line. According to an article by Yahoo Finance, McDonald’s sold its stake in Chipotle, which represented approximately 82.2 percent of the voting interest and 0.8 percent of the economic interest in Chipotle prior to the exchange offer.

It was that same article that stated that McDonald’s CEO at the time, Steven Easterbrook, said that Chipotle was a distraction and that the company executive wanted everyone to put 100 percent io their efforts into the McDonald’s brand, so they sold the company’s shares.  

According to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® as it turned out the distraction was with McDonalds’s company executives not with any of the company’s operations or trajectory at the time.  McDonald’s success if in large part because it continues looking ‘a customer ahead’.  They understand their own customer and know what else they want in at their stores and that each of their consumers wants to ‘share in their stomach’.

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 In an odd turn of events the once time high flying grocerant niche concept that was mismanaged was Boston Market. Both Chipotle and Donato’s Pizza continue to garner customer and drive top line sales and bottom-line profits with solid leadership.   Now let’s talk about McDonald’s eye for success.

In case you have not heard, CosMc's, is a McDonald's internal concept is a drive-thru-only concept, anchored by its beverage offerings, saw more than double the number of visits that a typical McDonald's location saw chainwide in the same month, according to a report from Placer.ai, which uses location data from mobile devices to estimate visits to specific locations. McDonald’s understand growing share of stomach according to Johnson.

So, when CosMc's, which opened on Dec. 7, 2023, generated triple the number of visits per square foot than an average McDonald's restaurant. The new format has a roughly 2,500-square-foot footprint vs. 4,000 to 4,500 square feet for the average McDonald's location, Placer.ai reported.

Now according to RJ Hottovy, head of analytical research at Placer.ai, the CosMc's location sometimes had to accommodate spillover traffic in a separate parking lot because the drive-thru lanes were often at full capacity, indicating the potential for more sales revenue. Let’s look a recent article so you get direct quotes:

"We saw quite a bit of demand. There were so many people in the drive-thru lane that if they had more capacity, the traffic numbers would have been a lot higher," he said.

The first CosMc's, which opened in Bolingbrook, Ill., is part of a limited test. McDonald's plans to open approximately 10 CosMc's pilot locations by the end of 2024, including across the Dallas-Fort Worth and San Antonio metro areas.

"I think this really is a test and learn concept, one to track younger audience and test menu innovations," Hottovy commented. "If nothing else, CosMc's is creating a tremendous amount of buzz and attracting new customers. It's just one location for now so doesn't look like it's cannibalizing McDonald's at this point but bringing in incremental visitors (the group that wasn't coming into McDonald's as much)."

The CosMc's menu is rooted in beverage exploration, with bold and unexpected flavor combinations, vibrant colors and functional boosts, according to McDonald's. It also features a lineup of food that includes a select few McDonald's favorites, as Convenience Store News  previously reported.

CosMc's offers a seamless digital and drive-thru experience, enabling customers to use dynamic menuboards and cashless payment devices during the ordering and payment process, with guided exploration and customization along the way. Drive-thru pickup windows are assigned once their orders are ready.

The format is named after CosMc, a little-known McDonald's character from the 1980s that the chain described as "part alien, part surfer, part robot," CNN reported..

Foodservice Solutions® team is here to help you drive top line sales and bottom-line profits. Are you looking a customer ahead? Visit GrocerantGuru.com for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may the clue you need to propel your continued success.