McDonald’s Tests No-Seating Store Model

JERSEY CITY, N.J. — When customers approach the McDonald’s on 12th Street here, they will be surprised to find the 2,225-square-foot restaurant has no door. In fact, it’s not at all the kind of McDonald’s they are used to.

Located just two blocks from the Holland Tunnel that connects New Jersey to New York, McDonald’s newest test model — which opened in February — has a walk-up window for ordering and picking up food, and two drive-thru lanes for cars. There's no indoor seating areas or ordering counters, reported NorthJersey.com.

This model is currently being tested in Jersey City, Texas, Georgia and Washington State. It is the first of its kind in the Northeast.

According to McDonald’s, this is the brand’s attempt to develop a new kind of restaurant that will cater to customers’ demand for speed and convenience, and allow it to build smaller, less costly stores that emphasize drive-thru sales, where they typically do most of their business, the news outlet reported.

“It’s part of an ongoing effort to be more relevant to consumers and meet their needs,” said Mwaffak Kanjee, vice president and general manager of McDonald’s New York Metro region.

The company is trying out a number of new concepts around the country, including restaurants in New York City and other locations where diners can use touchpad kiosks to order customized burgers with a variety of toppings and have their meals delivered to their tables.

McDonald's is also testing coffee kiosks at two Chicago locations that allow diners to customize their own lattes, mochas and cappuccinos for $2.99. The kiosk is located apart from the ordering counter, allowing customers who only want a coffee beverage to skip the food line and freeing up employees from having to make complicated coffee orders in the back, as CSNews Online previously reported. 

“We’re trying to stay ahead of our competition, and stay ahead of the needs and demands of our customers,” said Bruce Colley, franchise owner of the Jersey City store, who also owns 29 McDonald’s franchise restaurants in New York. “If we can serve good food and do it a little faster than our competitors, hopefully they’ll come back here rather than go someplace else.”

While McDonald’s is the U.S. fast-food giant — with more than $35.8 billion in sales in 2015 and 14,000-plus locations — the company has struggled in recent years as the growing trend toward fast-casual restaurants like Chipotle Mexican Grill and Panera Bread has taken away lunch business, and coffee chains like Dunkin' Donuts and Starbucks have taken a bite out of the breakfast business.

According to NorthJersey.com, it is for this reason that CEO Stephen Easterbrook of McDonald’s embarked on a plan to reenergize the company. Last week, McDonald’s reported its 2016 fiscal first-quarter earnings per investor share had increased 26 percent year over year and that comparable-store sales were up 5.4 percent in the U.S. and 6.2 percent globally.

“It’s very competitive,” said The NPD Group restaurant industry analyst Bonnie Riggs, adding that other food chains outside of the burger segment are also stepping up promotions.

McDonald’s has been challenged to speed up its service, too, Riggs told the news outlet. As the fast-food chain added more menu items and custom options, the menu became more complicated and people in drive-thru lanes took longer to place orders. “It just slowed down,” she said.

The Jersey City restaurant is designed to cut the wait time in half, Colley said, by offering two lanes where customers can place orders. Meanwhile, the walk-up window draws in customers who live in the neighborhood or motorists who are getting gas at the nearby Shell gas station.

McDonald’s has also seen competitors test drive-thru-only restaurants. This year, Burger King opened a drive-thru-only location in Illinois, which has become more popular than its indoor dining. Drive-thru typically accounts for 70 percent of the sales at McDonald’s with this option, the news outlet reported.