When McDonald’s announced that it would spend $6 billion on remodeling its restaurants, as investors we naturally wanted to know whether this substantial expenditure would add to the top line or tarnish the brand in the eyes of customers.
Our data science team was able to isolate the credit and debit card transactions made in the 839 “Experience of the Future” restaurants that were remodeled in the second half of 2017.
We found slightly slower growth in average spend in the new-look stores, with their new mix of self-service functionality and table service. They more than made up for it, however, with substantially increased growth in traffic. Whereas the number of repeat visits had been declining in the old-style restaurants, we saw it growing for the new model. Given the company’s plans to roll the new model out for most of its U.S. restaurants by 2020, these findings gave our analyst more confidence in its potential to report earnings upside over the next two years, against a tough background for the sector.
Average monthly growth, McDonald’s “Experience of the Future” restaurants
Source: Second Measure, Neuberger Berman.
This example shows how alternative data can be used to tease out the spending patterns of distinct subsets of a customer base, and track the performance of business initiatives in close to real time.