Service at McDonald’s is getting slower while the company is feeling the pressure on its operating hours as it struggles to fully staff its restaurants, CEO Chris Kempczinski said.
Speaking at the company’s third-quarter 2021 investor call on Wednesday, Kempczinski noted that McDonald’s is finding it “very challenging right now” to find skilled workers for jobs in its restaurants.
“But we’re also seeing is that it’s just, it’s very challenging right now in the market to find the level of talent that you need,” the CEO added.
Kempczinski said the lack of skilled workers is impacting the food giant’s speed of service and in turn putting “pressure” on its operating hours.
“And so for us, it is putting some pressure on things like operating hours, where we might be dialing back late night for example from what we would ordinarily be doing. It’s also putting some pressure around speed of service, where we are down a little bit on speed of service over the last, kind of, year-to-date and we did in the last quarter. That’s also a function of not being able to have the restaurants fully staffed,” Kempczinski said.
However, the CEO noted that the issue is “not unsolvable,” pointing to McDonald’s’ operated companies, which he said place more focus on engaging with staff and providing them with training in an effort to keep them motivated.
“That can make a difference,” the CEO said. “But certainly, I was hoping and expecting that we’re going to see the situation improved, maybe a little bit more quickly than what’s materialized. And I think it is going to continue to be a difficult environment for the next several quarters.”
Multiple companies, particularly those in the dining and hospitality sector, as well as small-business owners, are increasing pay for employees in an effort to counteract shortages and attract workers amid nationwide labor shortages and hiring difficulties owing to the COVID-19 pandemic.
The McDonald’s CEO also acknowledged supply chain issues currently playing out across the globe which has seen the price of goods soar along with consumer shortages.
Kempczinsk said commodity costs for McDonald’s were up 2 percent or so for the first nine months of this year, but that he expected this to grow to between 3.5 percent and 4 percent for the full year, which will put a little bit of additional pressure on the fourth quarter.
To offset the wage increases, labor pressures, and soaring supply prices, the fast-food company has raised its prices, with Kempczinsk noting that those increases are set to reach around percent year-over-year by the end of 2021, Kempczinsk said.
“We haven’t seen, I'll say any more resistance to our price increases than we’ve seen historically. So that 6 percent has been pretty well received by customers,” he said.
