McDonald's sees daily app usage jump 20%-40%

Brief:

McDonald's is getting a same-store sales lift from its mobile app said Andy Barish, an analyst at Jefferies, in a report cited by CNBC. He estimated the burger chain's same-store sales will rise 3% during the current quarter from a year earlier.
The mobile app offers discount menu options like $1 drinks, $1 sandwiches and free fries with a $1 purchase. The report cited SimilarWeb data that showed average daily usage of McDonald's Android app rose by 20% to 40% in recent months. "App downloads and install penetration data suggest digital strategy working," Barish said in the report.
Social media users are chatting about McDonald's menu items, which also will help to boost sales and average ticket size, he said, pointing to a rise in mentions of Big Macs (amid a 50th anniversary promotion of the burger) and the fresh beef in its quarter pounder and Signature Crafted burgers.

Insight:

McDonald's is making a big bet on mobile commerce with the expansion of delivery service to all its U.S. restaurants and in-app payment and ordering. Previously, McDonald's CEO Steve Easterbrook had tempered expectations for its mobile efforts by saying this year that customer adoption of its mobile app was "pretty low." He also said the company planned to work on improving the user experience, training employees and making the technology more reliable.

McDonald's may have turned a corner in its mobile efforts, if the SimilarWeb data and social media mentions cited by Jefferies analyst Barish are any recent indication. The chain has undergone a massive renovation and marketing effort to appeal to a new generation of consumers who are more health-conscious in their dining choices and like to eat out, but not necessarily at fast-food restaurants. A recent effort saw the chain promote mobile ordering with a sweepstakes that offered free food for life.

McDonald’s is investing heavily in its "Experience of the Future" concept that includes revamped stores with digital kiosk ordering and Uber Eats delivery service in more global markets. McDonald's has committed $2.4 billion to this initiative in the United States with a goal of remodeling 1,000 stores a quarter this year, per The Drum. McDonald's last month reported that U.S. same-store sales rose 2.6% in Q2 2018 from a year earlier, which disappointed investors despite stronger growth in international markets including France and the United Kingdom, per CNBC.