At McDonald’s, our presence on Britain’s high streets has been a fundamental part of our success in the UK and the bedrock of the important role we play in communities. However, the current economic environment is a fresh challenge. Never in my career have I seen such a period of unpredictability and volatility.
Despite the uncertainty, what won’t change is McDonald’s commitment to the high street. We strongly believe that high streets will continue to play a critical role in our everyday lives. They remain of strategic importance to our future success and the success of our franchisees – business people routed in their local communities.
The most successful hospitality businesses prioritise proximity to where consumers shop, work and live. In the UK, this is our high streets. These vital areas in our towns, cities and communities play a central part in the story of our nation’s unique retail and hospitality heritage.
The look and feel of high streets across the UK have been evolving or, for many, declining for some time. This is down to growth in online retail, the significant drop in footfall post-pandemic and now the turbulent economic environment we find ourselves in. One of the most obvious signs of this has been an increase in the number of vacant shops on our high streets – once the thriving heart of local communities – with the never-ending threat of more closures to come.
There is a political imperative to fix this, and people expect improvement as part of the levelling-up agenda. We are one month into a new administration that has a fresh perspective on how the government can deliver regeneration to the regions with an opposition that has pledged to scrap business rates and overhaul business taxation to help drive investment in our high streets. While many challenges and issues remain, it is a welcome development that the role of our high streets and how businesses can support their communities will be a key consideration ahead of a general election in 2024.
Here at McDonald’s, we are thinking hard about how we can help high streets thrive in these difficult times. Critical to this is meeting our customers’ changing expectations. Technology has changed the way we shop and interact with brands, and that includes the way we buy and order food. Sales via digital channels were 30 per cent of our business just three years ago and now account for more than half. In that same timeframe, our delivery channel has grown by the same amount that we’ve grown our drive-thru channel in the past ten years.
We see these changes in customer behaviour as an opportunity to reset the role of the high street estate. That’s why we’ve invested in our digital channels to allow customers to order their food in ways that are more convenient to them. Our digital kiosks in our restaurants, our app and our convenient “click and serve” offer for customers on the road are examples of how wider trends are changing. McDonald’s is no longer about simply going to the till or the drive-thru.
As a result, we recognise that high streets will need to change to meet the needs of our people and our customers in future. To ensure we stay relevant and can meet these demands, we are taking steps to review, refresh and redesign our high street estate. This includes the most ambitious redevelopment of our restaurants in the last decade. Over the next four years, with the support of our franchisees, we will invest more than £250m that will see us reimagine each restaurant to make the customer experience quicker, easier and more convenient. From redesigning our kitchens and being smarter about space, to better integrating our digital and delivery channels with our physical restaurants, we’re looking to elevate every aspect of the restaurant experience for our customers, crew and couriers.
Our customers and communities tell us that they would rather spend their money on experiences than on material items. That is why we are trying to make our restaurants more appealing by being increasingly experience-led, with improved dine-in areas with entertainment options and learning facilities for children. It is also why, more than ever, we need to find localised solutions and can’t adopt a one-size-fits-all approach. The situation demands us to be creative and innovative about what our future high street estate looks like. What works on one high street may not work on another.
Key to our thinking will be the same core principles that have guided McDonald’s since first opening in the UK in 1974: value, food quality and convenience. These are just as important to our customers as the experiences they have in our restaurants – perhaps even more so in tough economic times. This is what McDonald’s is famous for and what our customers can continue to expect of us.
As a brand that is present in most communities across the country, we absolutely understand the role we can play in partnering with communities and local and national government to revitalise our high streets, helping to make them thriving hubs for retail and hospitality for years to come.
McDonald’s is always open to collaborating with national and local stakeholders as we do so, using the data, insights and resources we have so that together we can ensure high streets remain a central part of our communities.