McDonald's IT outage highlights fast food sector’s reliance on digital convenience

The technology system failure at McDonald’s restaurants across Australia, China, Japan, and the UK underscores the imperative for substantial investment in digital services, on which fast food consumers heavily depend. Although McDonald’s has stated this is not related to a cybersecurity attack, many locations have closed temporarily, showing how costly these outages can be to operators, says GlobalData.

Hannah Cleland, Consumer Analyst at GlobalData, comments: “McDonald’s has significantly invested in digital ordering in recent years, including self-service order kiosks, smartphone delivery and takeaway apps, and AI-powered ‘drive-thru’ systems. The company has implemented these changes for greater operational efficiency and consumer satisfaction.”

GlobalData’s 2023 Q4 Global Consumer Survey* reveals that over a third of consumers globally (38%) claim that when it comes to purchasing food and drink, how digitally advanced/ ‘smart’ the product/ service is always/ often influences their choice. Significant disruptions and delays are not only frustrating but also have the potential to diminish consumer confidence and the likelihood of re-ordering.

Cleland continues: “The true cost of the disruption to sales during the McDonald’s IT outage is unclear, but it points to a need within the restaurant industry to get the basics right in terms of digital investment.”

Although global restaurant chains have been working to change this in the last couple of years, they are still underperforming in crucial areas such as cybersecurity (although McDonald’s says this was not the cause of their IT failure). For many players, it is a case of learning to walk before they can run towards a fully digital future.

Cleland concludes: “Beyond the streamlined experience, the backdrop of a cost-of-living crisis has also heightened consumer reliance on digital services. McDonald’s announced in its latest results that systemwide loyalty member sales had grown 45% in 2023 from 2022, up to $20 billion. Much of its loyalty programs are an app-based scheme. At a time when consumers are in a budgeting mindset, a lack of access to digital services can negatively impact sales. GlobalData’s survey* also revealed that 57% of consumers globally said they would find information about loyalty programs accessed via a QR code at a restaurant useful.”

*GlobalData 2023 Q4 Global Consumer Survey – published in December 2023, sample size – 21,000