Can McDonald's Tech Platform Unlock a New Wave of Margin Expansion?

McDonald’s Corporation MCD is leaning into a multi-year, technology-led transformation that could reshape its cost structure and improve customer engagement. The company’s “Accelerating the Arches” strategy is now being underpinned by three digital platforms — restaurant, consumer and company — designed to scale innovation, boost efficiency and enhance loyalty economics.

At the center of this push is the deployment of edge computing across U.S. restaurants, which enables AI- and IoT-driven capabilities such as predictive equipment maintenance, automated order taking and real-time operations management. Early results are promising, with “ready on arrival” geofencing cutting wait times by more than 50% in pilot markets. These innovations improve speed of service, enhance crew productivity and reinforce customer satisfaction. 

On the consumer side, McDonald’s loyalty program has surpassed 185 million active users globally in the second quarter of 2025. U.S. members who joined the program more than doubled their annual visits (from 10.5 to 26), highlighting the frequency upside as adoption scales. Management is targeting 250 million active loyalty users by 2027, positioning the brand to capture more consistent repeat spend while deepening digital engagement.

By integrating technology across restaurants, consumers and corporate functions, McDonald’s is establishing a scalable operating framework that supports both revenue growth and margin resilience. With the bulk of investment weighted toward 2025-2026, the company is positioning itself for operating leverage as digital platforms mature and efficiencies flow through the P&L.

In an environment where consumer value perceptions and traffic trends remain under strain, the ability to drive structural cost savings and throughput gains via technology could emerge as McDonald’s competitive differentiator over the next cycle.

How It Stacks Up to Competitors

Starbucks Corporation SBUX continues to leverage its digital ecosystem as a core growth driver, with the Starbucks Rewards program reaching approximately 34 million 90-day active members in the U.S. Loyalty penetration remains a key contributor to both transaction growth and average ticket expansion. The rollout of SmartQ technology, designed to alleviate peak-hour bottlenecks, along with new in-store equipment upgrades, is improving order throughput and reinforcing Starbucks’ premium brand positioning. For fiscal 2025, management is guiding to low-single-digit comparable sales growth, with digital engagement expected to remain a central lever for mix optimization and margin resilience.

Chipotle Mexican Grill, Inc. CMG is intensifying its digital strategy, with online and app-based transactions accounting for 35.5% of sales in second-quarter 2025. Its loyalty program, now with roughly 20 million members, remains a core engagement tool, helping to drive higher order frequency and digital mix. To support this growth, Chipotle has expanded its second digital makeline across more restaurants, enhancing order accuracy and throughput during peak periods. Management also emphasized ongoing investments in back-of-house efficiency and equipment upgrades aimed at improving productivity. While restaurant-level margin slipped to 27.4% in the quarter, down about 150 basis points year over year, management views these digital initiatives as key levers to restore Chipotle’s operating leverage and sustain long-term margin expansion.

The Zacks Rundown for MCD Stock

McDonald’s shares have gained 2.4% in the past three months against the industry’s decline of 3.2%.

MCD Three-Month Price Performance

From a valuation standpoint, MCD trades at a forward price-to-sales ratio of 8.14, significantly higher than the industry’s 3.79.

The Zacks Consensus Estimate for McDonald’s 2025 and 2026 earnings per share implies a year-over-year uptick of 5.5% and 8.2%, respectively. The estimate for 2025 has been northbound in the past 60 days.

McDonald’s stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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