Retail

McDonald's Foot Traffic Falling

The numbers have it: All-day breakfast isn’t pulling McDonald’s like it used to. As McDonald's starts to roll out its franchise-wide series of technological integrations and updates, the fast food giant is facing an issue of a different sort: falling foot traffic.

Sales are a different story, according to Forbes. The company posted some decent fourth quarter numbers. McDonald’s reported Monday (Jan. 23) that it saw $6.03 billion in revenue in Q4, beating Wall Street estimates, though down 5 percent year on year. Annual revenue for McDonald's reached $24.6 billion, down 3 percent year on year, while net income rose 3 percent to $4.69 billion.

But, as Bloomberg pointed out, domestic same-store sales were down 1.3 percent year on year. The number of customers that McDonald’s draws has reportedly been dropping every year for the past four, falling 2.1 percent in 2016. All told, it adds up to a 10.4 percent fall in foot traffic, according to Nation’s Restaurant News (NRN).

NRN noted that all-day breakfast numbers might be obscuring a greater loss in customer numbers, estimating a 12.5–13.5 percent decrease in foot traffic for lunch and dinner crowds.

While McDonald’s is behind on in-store technological integration compared to competitors like Panera or Starbucks, the fast food giant has plans to catch up quickly. McDonald’s is in the process of rolling out mobile ordering, mobile payments and delivery options across its worldwide stores.

In addition to mobile ordering and delivery, McDonald’s is upping its in-store tech and planning to add self-service kiosk ordering, digital smart menu boards, custom-order options and even table service. It’s working toward rolling out these technology upgrades in all of its worldwide locations by the end of 2018.

For now, we’ll have to wait and see if the boost in technology will translate to a boost in consumer interest. There’s certainly precedent for this across the retail industry as more and more consumers vie for in-store tech.

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