McDonald’s operator expects sales boost from NXTGEN stores
By Arra B. Francia, Senior Reporter
GOLDEN Arches Development Corp. (GADC) sees sales improving by about 10% as it continues to modernize existing stores, with more customers getting used to self-order kiosks and cashless payments.
The master franchisee of the McDonald’s brand in the Philippines currently has 95 NXTGEN stores out of more than 620 branches under its network. These stores feature a multi-point ordering systems, modernized menu boards, and a new design that aims to elevate customer experience.
“So far we’re seeing an uplift of sales between 5-7% after the store is converted to NXTGEN,” GADC Managing Director Margot B. Torres told BusinessWorld during the opening of their newest NXTGEN store in Bonifacio Global City (BGC) on Thursday.
Ms. Torres expects this trend to continue as they put up more NXTGEN stores.
McDonald’s at Finance Center is the newest store under its network. With a capacity of 132 people, it will be one of eight NXTGEN stores that the company operates in BGC alone.
Ms. Torres said the company expects to have more than 700 stores by the end of 2021, 70% of which are expected to be NXTGEN stores. By end-2019, the company aims to end with 670 branches.
To further help customers transition into NXTGEN’s system, the company also appointed guest experience leaders who can assist customers when they order through the self order kiosks and entertain other concerns.
Ms. Torres said they observed that more people prefer using the self-order kiosks rather than the traditional order points.
“They have a certain level of control, meaning you don’t have to rush, you don’t have to line up. They also have a certain level of control in the choices they have and they can see the prices depending on what orders you add,” Ms. Torres explained.
GADC also has 185 stores under its network that offer cashless payments like Paymaya.
Ms. Torres said NXTGEN stores usually cost 10% more than the regular stores, with most of the additional investment going to changes in technology.
Moving forward, Ms. Torres expects the quick-service restaurant industry to grow by 4-5%, driven by the more players coming in to the market.
“There will be growth in the informal eat out market, and usually we’re growing faster than the informal. That’s why we’re also very bullish about our own growth,” Ms. Torres said.
On the downside, the company sees the rising cost of goods to weigh on profitability, especially the higher tariffs on potatoes amid the US-China trade war.
GADC is led by businessman George T. Yang, who holds the master frachise for the McDonald’s brand in the country.
The company reported flattish growth in attributable profit at P751 million in the first half of 2019, following a 14% increase in sales to P15.4 billion.
