McDonald's CEO Thompson: China Is a Growth Market

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July 24 (Bloomberg) -- McDonald's President and CEO Don Thompson discusses the company's global growth with Betty Liu on Bloomberg Television's "In The Loop." (Source: Bloomberg)

Mcmuffin and coffee.

Let's start with the u.s. challenges.

What is going on.

? in the u.s. we seek mixing.

We see some signs that say there is a bit of a recovery relative to the economy.

Unemployment is fairly level at mid-7% title.

A little bit of recovery in housing sector.

Again, it looks like there is a little bit of recovery.

I'd think we have seen with the payroll tax and whether or not that is following through, the positive side is we have seen lower fuel costs.

To go i know you mentioned the payroll tax and the implications on consumers.

As it turned out not as bad as you expected?

We never did a warning.

We said we did not know how we would play out.

Thus far we have not seen a tremendous impact from petrol tax alone.

What we see is the informal evening out category is contracting.

So we are seeing that play out.

We are gaining market share.

We feel really good about that.

Nonetheless, it is fairly tepid in terms of informal meeting.

You travel around the world.

You travel less as ceo often when you were chief operating officer.

In europe you have mentioned before that things are pretty bad they're still.

Some have said we're in a recovery in europe, but if you have said before, i am not sure i see that everywhere.

I sink if you were in europe, many of the countries would say they do not necessarily see themselves and recovery mode either.

The southern part of europe clearly we need think about what is happening in spain, portugal, italy.

Unemployment rates are about 10%. spain is about 27% unemployment.

The bigger challenge is youth unemployment.

You have challenges that are based on the macroeconomic factors of unemployment but also come austerity-based measures.

We're gaining market share in many of the markets come despite contracting and disagreement -- discrepancy spending softer.

We have to stay focused on customers.

Focused on making sure we have the right value and the right news and premium products to appeal to customers.

When that happens, we're at our best when we start to focus on the market.

There is a lot of markets overseas.

One of our fastest growing overseas.

, sales in the second quarter down 6%. you mentioned it had to do with avian flu and what happened, but kfc, yum!

Brands, they have gone ahead of you in china.

How will you catch up?

We have been gaining share back again in china.

It has been a troublesome relative to what happened with chicken.

There was an antibiotics scare, which was not part of our supply chain, but nonetheless, it impacts consumers.

That was followed up by eight avian influenza --followed by abn influenza.

We have seen that avian influenza impact dissipate.

That is great for the marketplace.

We're seeing customers starting to come back relative to chicken purchases.

China will be a positive market for us.

We are not engaging our success in china based on someone else.

-- we are now engaging our success in china based on someone else.

-- gauging our success in china based on someone else.

Is most popular in china?

China is a big chicken market.

The predominant menu is chicken.

A lesser extent relative to beef.

We of a lot innovate of chicken products, but pete is growing.

We think we're well positioned in china.

Back here in the united states to have to continue to grow market share.

Some said we're scratching our heads.

It will take a lot for mcdonald's to move the needle.

Something has to happen with the economy or something incredible has to happen with a product.

Who knows.

They said the company is so big it will really take something to move the needle.

What did you say to that?

I think everyone needs to keep in mind, we grew revenues.

Not everyone is growing revenues.

We grew income.

We grew earnings per share and we have taken the market share.

We have outperformed the competitive set.

There are a few players doing well.

We're doing well in the u.s. relative to our own positioning.

To continue to grow we have to continue to appeal to customers.

That is why you have seen it quite the light -- egg white delights at breakfast.

I tried this in which you may.

It was ok.

It is like you have seen asus appeal and beverages.

Blueberry pomegranate.

We have premium beef and customers that want a different taste.

Bacon habanero ranch.

We have to make sure we have a good image.

A new look.

Almost 50% complete with the way our book has a contemporary look.

Those things we have to make sure we are continuing to do.

There have been reports you are looking to streamline the menu.

Are you looking to take items off so it is not confusing to customers when they walk into your restaurant?

You have had a chance to spend time at either hamburger university or in our kitchen.

Today customers are not confused walking into the restaurant.

We look at products on the menu and decide we want to move this product up, we're looking at that not from a sheer capacity standpoint, what we're looking at is whether or not there are other products that might appear more -- appeal more.

If you take a product off, it does not mean it is going off for ever.

We have products we have taken off.

Is there any category you are looking at right now for trimming down?

I would say there is no category that we're thinking of coming down in terms of a whole category or whole platform.

We're still in the business of selling great sandwiches, whether it is chicken or beef.

New entree formats.

Breakfast, a great muffin and sandwiches.

You have the mcdonald after midnight concept.

Mcdonald's after midnight.

You have tested that out in a few markets.

Is that something you might roll out nationally?

I think the u.s. leadership team will make a determination as to what happens with mcdonald's after midnight.

We have similar initiatives in other parts of the world, and i think there is data that says this is a positive thing.

I think a franchisee's in leadership teams will decide how aggressively we move was something like that.

We mentioned we would solicit questions from viewers.

I want to read the first one to you, which is relevant to our conversation.

This comes from michael dowd.

He asks, how you plan to make your brand look fresher in the mind of consumers?

A great question.

This is an everyday thing for mcdonald's. what we call reemerging, basically every model of the restaurant.

That is all about making sure there is a contemporary look and feel.

You each with your eyes first.

We want to make sure the physical assets are contemporary.

The menu has to be innovative and exciting, while maintaining the heritage and quality and taste of core values.

Big macs still very relevant.

We want to make sure the big mac still has a home in mcdonald's and the customers who love it are still able to get it.

By the same token, blueberry pomegranates mcpeak is something we never thought about 10 years ago.

You will see differences in our menu.

It will be fueled by taste from around the world.

That is another piece of making sure we remain relevant.

We do a lot for our people in the restaurant relative to the training, the systems in sales

This text has been automatically generated. It may not be 100% accurate.


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