McDonald’s is making a big bet on self-service kiosks

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McDonald’s Corp. is planning to expand the number of restaurants with self-service kiosks, adding them to 1,000 of its restaurants each quarter for the next two years, Chief Executive Steve Easterbrook said on Monday.

The fast-food giant MCD, +0.78%  first started offering the self-service option about two years ago and is now beefing it up with new ways for customers to order and pay including by mobile means, Easterbrook told CNBC.

The self-service kiosks allow customers to peruse the menu, customize their own food options and even ask for table service.

“What we’re finding is when people dwell more, they select more,” he said. “So there’s a little bit of an average check boost.”

McDonald’s is trying to add choice and variety to its menu and wants to spruce up its restaurants, he said. “Particularly here in the U.S., they have got a bit tired looking, so part of this is also about having a much fresher, more inviting restaurant,” he said.

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The self-service program is more advanced in international markets, and is fully complete in Canada, the U.K. and Australia, he said. Some locations in France and Germany are almost ready with the new technology.

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“We do know it helps grow the business, we know it’s the right route to go down. We can’t get there quick enough in the U.S.”

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McDonald’s posted net income of $1.38 billion, or $1.72 a share, in the first quarter, up from $1.21 billion, or $1.47, for the same period last year. Adjusted EPS was $1.79, ahead of the FactSet-compiled analyst consensus of $1.67.

Revenue totaled $5.14 billion, down from $5.68 billion last year, but well ahead of the FactSet consensus of $4.97 billion. Global same-store sales rose 5.5%, above the FactSet consensus for 3.6% growth. U.S. same-store sales met the FactSet consensus with a 2.9% rise, driven by menu price increases that led to average check growth.

McDonald’s shares were up 0.6% in afternoon trade Monday, but have gained about 42% in 2018 to date. The Dow Jones Industrial Average DJIA, +0.72% which counts McDonald’s as a member, has gained 0.3% in the year to date, while the S&P 500 SPX, +0.47%  has gained 2.7%.

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