McDonald's puts reopening on hold for 3 weeks as COVID-19 spreads

Dive Brief:

McDonald's announced Wednesday that it will wait three weeks before opening additional restaurants for dine-in service, The Wall Street Journal reports.
“This surge shows nobody is exempt from this virus — even places that previously had very few cases,” said a company letter by Joe Erlinger, McDonald’s U.S. president, and Mark Salebra, head of the National Franchisee Leadership Alliance owners association, that was obtained by CNBC. “Moving forward, we will continue to monitor the situation and adjust as needed to protect the safety of our employees and customers.”
Roughly 2,200 of the chain's 14,000 U.S. units are open for limited dine-in service, and restaurant operators can continue to let diners eat inside if local municipalities allow it, according to the letter. McDonald's began reopening dining rooms in May.

Dive Insight:

McDonald's decision comes as a growing number of states reverse their reopening plans ahead of the July 4 holiday weekend. California Gov. Gavin Newsom ordered 19 counties to halt indoor dining Wednesday for at least three weeks, for example, as novel coronavirus cases surge across the state. This news comes just weeks after dining rooms were given the green light to serve consumers in several counties in mid-May, with Los Angeles County allowed to reopen dining rooms in late May. But officials reported that 49% of bars and 33% of restaurants in L.A. county were bucking social distancing requirements over the last week, and that workers at 54% of bars and 44% of restaurants weren't wearing face masks or shields.

McDonald's was recently sued by five Chicago-area employees for failing to provide personal protective equipment to its workforce, and that a manger didn't tell workers that she had contracted COVID-19. This alleged mismanagement came to light shortly after the chain released its 59-page reopening guide, and the situation sparked strikes across the country. A McDonald's franchisee in Oakland has also been accused of forcing infected employees to continue working, and with inadequate PPE.

This backlash, coupled with the fact that many experts link gathering in crowded spaces like bars and restaurants to recent COVID-19 outbreaks, makes McDonald's cautious play look like a good call. While dine-in seating is crucial to the survival of casual and fine dining chains, the QSR's robust drive-thru network and delivery partnerships make it unlikely that it will suffer serious losses for not continuing to roll out dine-in service across its U.S. network. The decision could also grow consumer trust in the brand, though it's possible that diners in some markets could be frustrated that their local McDonald's dining room is still unavailable around the end of the month.

It's unclear if this three-week hold on reopenings will impact McDonald's hiring plans. The chain announced last month that it plans to bring 260,000 new employees on board this summer.