At McDonald’s, signs of improvement in the labor crisis

Photo courtesy of McDonald’s

The COVID labor crisis seems to be easing, at least if you look at McDonald’s.

Chris Kempczinski, CEO of the Chicago-based burger giant, said only 1% of the chain’s restaurants are operating with shortened hours due to the COVID-19 pandemic. That was down from December’s 10%, which he referred to in a recent interview with The Wall Street Journal.

“When I made that comment, it was mid-December, and we were at the peak of Omicron,” he said, referring to the omicron variant of the coronavirus that has been showing up in many many cities from December.

Over the next five weeks, Kempczinski said, franchisees worked to ensure their restaurants were fully staffed. “Our franchisees have done a tremendous job of finding ways to attract the talent they need to restaurants to keep restaurants running, he said.

The latest outbreak of infections continues to cause problems at restaurants across the country, leading to temporary closures as people call in sick and operators cannot find enough staff to keep operating. Still, Kempczinski’s comments suggest an improving environment on that front, given the sheer size of the channel.

Yet overall labor costs are rising. Wage rates have increased by 10% over the past year. Rising labor costs have eaten into the company’s margins and driven operator prices higher, although the company says there is no indication of a pullback yet. client.

And many restaurants remain with limited services. Kempczinski said about 80% of the chain’s dining rooms are currently open. Or, in other words, 20% of them are closed.

The company wants more of these dining areas to be open, for one simple reason: to reduce pressure on drive-thru. Executives said Thursday that its drive-thru hours were affected in 2021 due to labor issues. It was a step back after a years-long effort to improve speed on the crucial lane, which even before the pandemic was driving around 70% of sales.

“We’ve put extraordinary pressure on drive-thru as we closed some dining venues in 2021,” Kempczinski said. By opening dining rooms, he said it would reduce pressure on the drive-thru and could help reduce service times.

“We have seen a slight decline in service times due to the operating environment,” he said. “The challenges of just making sure we have the staff we need.”

He said the company is focused on improving these service times, seeing them as key to building customer loyalty. “When we reduce service times, we find that customer satisfaction increases,” Kempczinski said. “It’s something we all focus on.”

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