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Gradient Investments President Mike Binger explains why he added McDonalds and Ulta Beauty to his portfolio on The Claman Countdown.
The “technology outage” that impacted McDonald’s restaurants and the company’s app on Friday underscores the fast-food giant’s growing reliance on tech systems that are becoming increasingly common in the food service industry.
Friday’s outage impacted McDonald’s locations across some of its global markets, including Japan, Australia and the United Kingdom, which forced many stores to temporarily accept only cash or shut down entirely in some cases. The company hasn’t disclosed how widespread the outages were, but a franchise in San Antonio, Texas, couldn’t accept orders in its app or cash as of Friday afternoon – 12 hours after it began.
McDonald’s said the outage was caused by an unnamed third-party provider during a “configuration change.” McDonald’s EVP and Global Chief Information Officer Brian Rice said Friday that “reliability and stability of our technology are a priority” and in a follow-up Saturday said that “all of our restaurants globally are now open and serving customers” with the company analyzing the issue to hold internal teams and vendors accountable. The outage comes shortly after McDonald’s filed its annual report referenced the potential challenges to its operations posed by technology outages.
“We are increasingly reliant upon technology systems, such as point-of-sale, that support our business operations, including our digital and delivery solutions,” McDonald’s wrote in the report filed with the Securities and Exchange Commission filed on Feb. 22.
MCDONALD’S HIT BY WORLDWIDE TECH OUTAGE AFFECTING RESTAURANTS, APP
McDonald’s warned about the potential risks of its reliance on technology platforms in a recent regulatory filing. (Photo by Brandon Bell/Getty Images / Getty Images)
“Any failure or interruption of these systems could significantly impact our or our franchisees’ operations, or our customers’ experiences and perceptions,” the company added.
McDonald’s also warned that there are some risks from the artificial intelligence (AI) tools it’s deploying to its systems.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| MCD | MCDONALD’S CORP. | 279.07 | -2.87 | -1.02% |
The report said that “the artificial intelligence tools we are incorporating into certain aspects of our restaurant operations may not generate the intended efficiencies and may impact our business results.”
The outage is unlikely to cause McDonald’s to diverge from its long-term strategy of deepening its reliance on technology to increase efficiencies and improve the company’s performance.
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The outage on Friday impacted McDonald’s apps as well as some restaurant locations. (Photo by Smith Collection/Gado/Getty Images / Getty Images)
McDonald’s has looked to encourage customers to order through digital tools like its mobile app and kiosks, which made up about one-third of sales in the company’s top markets in 2022.
In December, McDonald’s announced that it will partner with Google to move its computer systems into the could, where the global scale of company data will allow McDonald’s generative AI system to “better understand the broadest range of patterns and nuances,” resulting in what it said at the time would be “hotter, fresher food.”
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About one-third of McDonald’s sales in top global markets came from digital platforms like apps and kiosks. (Justin Sullivan/Getty Images / Getty Images)
Generative AI already plays a significant role in powering restaurant operations and marketing to customers through personalized pitches based on internal customer profiles.
Reuters contributed to this report.
