Service at McDonald’s is getting slower as the company feels pressure on its hours of operation as it struggles to fully equip its restaurants, CEO Chris Kempczinski said.
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Speaking on Wednesday during the company’s third quarter 2021 investor appeal, Kempczinski noted that McDonald’s is finding it “very difficult right now” to find qualified workers for jobs at its restaurants.
“Certainly, it’s a very difficult recruiting environment in the United States, a little less in Europe, but still difficult in Europe. In the USA for us, we see … that there is a salary inflation. Our franchisees there are raising their wages by more than 10 percent wage inflation since the start of the year that we are seeing in our McOpCo (McDonald’s Operated Company) restaurants have increased wages by more than 15 percent, and this has useful benefits, certainly, the higher the wages you pay keep you competitive, ”Kempczinski said.
“But we also find that it’s fair, it’s very difficult right now in the market to find the level of talent that you need,” added the CEO.
Kempczinski said the lack of skilled workers impacted the food giant‘s speed of service and in turn put “pressure” on its hours of operation.
“And so for us, it puts some pressure on things like opening hours, where we could call back late at night, for example, from what we would normally do. It also puts some pressure on service speed, where we’ve been down a little bit on service speed over the last year sort of and we’ve done that in the last quarter. It is also a function of not being able to have full staff in restaurants, ”said Kempczinski.
However, the CEO noted that the problem is “not unsolvable,” pointing to companies operated by McDonald’s, which he says are placing more emphasis on engaging with staff and training them to keep them motivated. .
“It can make a difference,” said the CEO. “But certainly, I was hoping and expecting the situation to improve, maybe a little faster than what happened. And I think it’s going to continue to be a tough environment for the next few quarters. “
Many companies, especially those in the restaurant and hospitality industry, as well as small business owners, are increasing employee wages in an effort to address shortages and attract workers amid labor shortages -work at the national level and hiring difficulties due to the Covid-19 pandemic.
The McDonald’s CEO also acknowledged the current supply chain issues around the world, which have seen commodity prices skyrocket along with consumer shortages.
Kempczinsk said staple costs for McDonald’s increased by around 2% for the first nine months of this year, but expected them to reach between 3.5% and 4% for the whole year, which will put a little extra pressure on the fourth quarter.
To offset wage increases, pressures on the workforce and skyrocketing supply prices, the fast food company has raised its prices, with Kempczinsk noting that these increases are expected to reach around one percent from a year on the other by the end of 2021, said Kempczinsk.
“We haven’t seen, I’ll say more resistance to our price increases than we’ve seen historically. So these 6% have been rather well received by customers, ”he said.
President Joe Biden attempted to alleviate supply shortages and disruptions leading up to Christmas, and earlier this month he said he received confirmation from UPS, FedEx, Walmart and other companies, as well as the Port of Los Angeles, to increase the number of shifts to deal with a backlog of container ships, labor shortages and warehousing issues.
Despite the labor shortage, McDonald’s global comparable sales grew 12.7% in the third quarter and 10.2% year over year, according to its third quarter results published Wednesday. The company achieved total sales of $ 6.2 billion.
By Katabella Roberts
Katabella Roberts is a journalist currently based in Turkey. She covers current affairs and business for The Epoch Times, focusing primarily on the United States.