McDonald's (MCD) New Mobile Ordering Highlights a Commitment to Change - TheStreet

It is a challenging time for the restaurant industry.

Increased competition and pressures caused by across-the-board, dwindling sales have led many restaurant chains to rethink their businesses to keep consumers and investors happy.

Fast-food giant McDonald's (MCD) - Get Report has been no different. The iconic, company has set in motion many major changes since March 2015 when British-born Steve Easterbrook became chief executive.

Last week, McDonald's announced another innovation -- mobile ordering -- that should give a nice boost to its business and stock. The various changes at the company are a reason for investors to consider buying shares.

Shares of McDonald's rose slightly in Friday trading. 

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The company's sales had been threatened by the rise of the fast-casual segment. This new style of restaurant features counter service similar to fast-food joints but with ingredients that are generally perceived by consumers as fresher and healthier. 

Easterbrook's first big change was to incorporate an all-day breakfast menu. Since that success, he has embarked on several other endeavors to revamp the Golden Arches, including moving the company's headquarters from its longtime campus in a Chicago suburb to one of the city's most up-and-coming neighborhoods.

The restaurant industry is struggling under the weight of a so-called restaurant recession. The addition of relatively new fast-casual companies to the mix including Panera Bread and Shake Shack has narrowed the market share of fast-food companies.

Low prices for groceries and produce on supermarket shelves have many Americans cooking at home, rather than eating out.

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McDonald's has been moving its business closer to the fast-casual segment. The company is attempting to erase a decades-old reputation of having over-processed, unhealthy food.

Among other changes to its menu, McDonald's has eliminated high-fructose corn syrup in some of its bakery products. The company has also promised to move toward cage-free eggs and antibiotic-free chicken, and it has been testing more gourmet menu items, including local favorites in certain markets, as well as new sizes for its burgers.

Last week, McDonald's said that it will introduce table service to its restaurants, whereby customers have the option to order via kiosk rather than counter and have their meal delivered to them.

On Friday, the company announced mobile ordering in 10 markets.

This is a play straight out of Starbucks' book, though Dunkin' Brands has followed suit, as well. Customers will be able to order and pay via a mobile phone application ahead of time and conveniently pick up orders in a store.

This type of customer-friendly convenience is a rising trend among all types of service companies and is a sign of Amazon's influence. It will help McDonald's keep its edge as the restaurant industry faces continued headwinds.

McDonald's is a true legacy stock, one of the great American companies that should stand for several lifetimes. Grab shares on any dips and hold for the long term.


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The author is an independent contributor who at the time of publication owned none of the stocks mentioned.