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McDonald's CEO: Mobile is a huge opportunity

April 29, 2013

McDonald's CEO Don Thompson sat down for an interview on CNBC's "Squawk on the Street" program last week and offered a few insights into the company's China business, menu pipeline and efforts to attract the millennial consumer.

Highlights from the interview include:

Millennial consumers are changing the landscape of quick-service restaurants, as they have a higher demand for fresh, organic food. McDonald's, Thompson said, is vulnerable because consumer tastes are changing. The company is responding by focusing on new product launches such as the McWraps.

"Millennials are the target with that (McWrap) launch. They love the fusion of taste, the freshness of cucumber slices, the assortment of spring mix," he said. "They love these things coming together in a nontraditional carrier."

In addition to product launches, McDonald's is increasing its digital spend and doing more activations such as music festivals to woo this generation.

Mobile— payment, loyalty programs, etc. — is a "huge" opportunity for McDonald's, Thompson said.

"I will recognize as a global system, we've been a little bit late to the mobile entry party," he said.

McDonald's is conducting a variety of mobile tests around the world. Sweden and Canada, for example, are offering mobile payment options, while Australia's mobile app tracks the supply chain so consumers can see where their food comes from.

"Mobile for us is much more than just the pay, it is the consumer engagement so they understand what they're getting out of the McDonald's experience," Thompson said.

China also remains a big opportunity for the Golden Arches as that economy continues to grow rapidly.

"We have to look at some of economic indicators and one of those is automobile purchases. If we can build a traditional restaurant with a drive-thru, which we know how to run very, very well, then we know we'll be able to grow that business for years to come," Thompson said.

Other points of interest:

• McDonald's includes delivery options in some of its global markets, such as Latin America. Thompson said the service may come to U.S. markets, particularly those without a lot of drive-thru units such as metropolitan areas. Burger King currently offers delivery in a handful of large cities. 
• Thompson said the company would consider offering its popular breakfast options all day long.
• McDonald's also may see a loyalty program based on points in the future.
• Finally, the company's priority is socializing its ideas around the world. "Our challenge, as we move forward, is how do we leverage and scale ideas more quickly in this global environment?" Thompson said.

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