McDonald's spent millions fixing an infamous part of its business -- and it's the best decision in years
McDonald's sales are soaring after years of declines.
Sales at restaurants open at least a year jumped 6.2% globally, including a 5.4% increase in the US, in the most recent quarter. That's the third straight quarter of increases after two years of declines.
The company has finally turned business around by making a couple key changes to the menu, such as adding breakfast all day and offering new value options.
But there's another move that has been critical to McDonald's success: improving customer service through wage increases and training.
The fast-food chain has long been plagued by complaints about poor customer service.
Problems that customers have cited in the past include inaccurate orders, long waits for food, rude employees, and lack of cleanliness in restaurants.
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To try and fix things, the company made a major investment in employee wages and benefits last year, lifting the average hourly wage from $9.01 to $9.90 in July. The company says the average hourly wage will exceed $10 by the end of this year.
McDonald's also started allowing workers to earn up to five days of paid vacation every year, and invested in training with the implementation of new procedures like "ask, ask, tell" to speed up drive-through service.
"The core frustration for customers was accuracy through the drive-thru, which then impacts service times," McDonald's CEO Steve Easterbrook said on an earnings call in April. "I can't even tell you how detailed the team has got to help our restaurant teams get it right more often."
The training and wage investments have had a significant impact on customer service, according to Easterbrook.
He said the changes "have resulted in lower crew turnover and higher customer satisfaction scores... and we are gaining share relative to the [fast-food] sandwich segment."
Customer satisfaction scores were up 6% in the first quarter, compared to the same period last year, he said.
The wage investments only impacted employees at company-owned restaurants — which represents just 10% of McDonald's US restaurants, or about 90,000 employees.
But many McDonald's franchisees likely followed suit with their own wage increases. In a survey last year, several operators said they felt pressure to raise employee pay in the aftermath of the McDonald's wage announcement.
While the company is making progress with its investments in employees, labor groups say the chain hasn't done nearly enough.
The union-backed "Fight for $15" campaign, which is pressuring McDonald's to raise wages to $15 an hour, is planning a massive protest at McDonald's headquarters this week as the company kicks off its annual shareholder meeting.
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