Inside mcdonald's. live with don thompson, ceo a largest restaurant in the world.
Sales are up and now the company's ceo sounds off on taking pizza to the global consumer.
Shopping for profits.
And what it is like to work for eddie lee apart.
-- eddie lampert.
From bloomberg world headquarters in new york, this is "in the loop" with betty liu.
I am adam johnson.
Betty liu is in chicago taking as inside mcdonald's. starting with the next two hours.
What is on the menu?
A lot is on the menu.
As you mentioned, we have gone inside and going even deeper inside mcdonald's all day today.
We will have the exclusive interview with the mcdonald ceo.
A couple of facts, it is the second-largest private employer here in the united states, almost 2 million people worked at mcdonald's. a portion of them go through hamburger university, training grounds.
They have seven around the world.
We are here right outside chicago where they have headquartered him recorder -- hamburger's university.
I went to the class's and believe i will get a diploma a little bit later.
I was able to make a few cheeseburgers and fries.
We will highlight that.
That allows employees to rise up through the ranks.
Here is another interesting test -- a statistic.
Have you worked at a mcdonald's in your life?
People know no, i have not.
I have eaten a lot of mcdonald's. -- nok,, i have not.
One in eight people have.
There is a lot on tap.
A fast-food competition around the world.
Growth in emerging markets in china and the lot of debate over the health of food at mcdonald's and fast food and general and the debate over minimum wage or wages.
We will get into all of that with the ceo who will join us in the next hour.
Have you had a chance to try the new chicken wrapped?
Have you tried it?
Sego yes, and i actually got to make one.
You will get to see my culinary skills.
That will be a lot of fun.
Dominic chu in the newsroom with the latest on for reporting and earnings beat in the last hour.
We're all over tech.
Cory jobs and up early and in san francisco with everything you need to know about apple after the reported an earnings beat last night.
-- corey johnson.
First, we will start with a company that i know fairly well.
You probably know it well as well, boeing, $1.67. sales also beat estimates.
A record backlog.
$410 billion worth of orders, which is why the company was able to up the guidance by 1.5%. the stock is up 1.7%. that is that a new all-time high.
Despite the headlines with the landing gear that did not come out a couple of days ago, the fact is they keep moving ahead and flying very high.
Stay and with the motors.
-- staying with motors and talk ford.
Detroit grapples with bankruptcy.
Dominic chu has all of the numbers.
Take them forget about the headlines.
For ford is coming up in rosese.
-- forget about the headlines on detroit.
They boost the full- year pre-tax profit forecast.
It is not just their ticker, but strong demand for fusion series of cars in the west.
Now top-10 selling car according to auto data.
All about the focus model.
69 percent sales growth of the first half of the year, in china.
And of course of f serireses demand for the pickup truck.
All about the recovery in oil and gas industry as well.
Strong demand for pickup trucks there.
Talking about a big story of global economic rebound in certain parts leading to sales demand.
Also in the hypersensitive growth of china as well.
That is so key.
Sell more cars in china than in the west.
The ford auto maker will at 3000 additional jobs tied to keep up with demand.
It sounds good, but michael mckee joining us with the real deal in says it is basically too little, too late.
It is nothing.
Good news for the national economy and state of michigan, but it underlines why the city is in such trouble at this point.
We tend to use detroit as is a the them.
Only gm has its headquarters in the city.
Chrysler is an auburn hills.
One of the city's biggest problems.
As auto makers moved out, so did the auto makers and the jobs.
You have seen the pictures.
The auto companies are nothing like the work.
Half of what the workforce was what it was 10 years ago.
You are resident within the city, you could still apply, assuming you of a car and get to the job.
The good news is they will at 3000 jobs.
85-90% of them will be in michigan.
Planning to hire 12,000 workers by 2015. if you live in the city, this is what you will focus on.
Of the 3000 jobs you need to be a technical professional to qualify for 2400 of them.
Only 5 percent of a graduate degree.
Only 12% have a college degree at all.
Most of the jobs are scattered across the country.
Ford has no facilities inside the city limits.
Do not expect champagne corks popping.
To come a good point, they're hiring programmers, not necessarily guys who work the line.
Michael mckee with the real deal.
We will stay keyed into the auto world all day on bloomberg television.
Touched a chord ceo on street smart coming up later in the day.
Moving west, focusing on apple and facebook.
Adam johnson has the take away.
Jon erlichman is watching facebook ahead of earnings that come later tonight.
What did we learn about the iphone business last night?
To go the stock market seem to like what happened after the earnings came out.
If you look at the actual results, the results were mixed.
Revenues grew year over year.
Meanwhile, you have profits like taxes and investment gains.
Operating profits were down 20%. 20 percent in less revenue.
Not a great, strong growth quarter.
They talk about a couple of issues that got people excited.
This represents well over 50 percent of the revenues.
Thus quarter sales only 7% year over year growth.
This quarter the reported 20% year-over-year growth.
It is better than the last quarter.
I think that was seen as an encouraging sign.
They came out very vocally and said they would release new product in the fourth quarter.
This shows how badly they need to get the market excited and primed for something better happening around the fourth quarter.
To come long history -- longest string in history they have not come out with something new.
The ipad many we exhilarated things for the company.
Year over yields -- year over year sales slowed down.
Then they picked up with the release of the mini.
They had -14% unit growth.
14 percent fewer than a year ago.
So that is a big change as well.
We are constantly talking about increasing of mobility, a move to tablet.
Apple dominates that well over 80% market share.
What we found out last night was year-over-year sales also slowing dramatically.
Are a lot of things really slowing down in terms of growth.
The market is not growing as fast as it was globally, let alone in the u.s.. finally, they have not introduced new categories.
We might expect them to a least address to of them with new categories in the fourth quarter.
-- two of them with new categories in the fourth quarter.
Falling price of the ipad.
That is the effect of the ipad mini.
The result is the overall average selling price for all of them coming down.
Focusing on facebook now.
From a growing mobil advertisements hills to introducing video on into the gramm, a busy year for mark zuckerberg and company.
Jon erlichman has a preview.
The question is, can the growth story continue?
I think the answer is yes.
For a lot of investors facebook has not been a growth stock they thought it would be.
The growth story is a very real one.
Obviously when you get north of a billion users, hard to grow that number.
You can grow the advertising business.
You could be looking at growth north of 35%, possibly stronger growth and google had committed parable quarter and give back to the issue of targeted advertisements.
They have introduced a lot of advertisements to make sure when you are scrolling through facebook to see something that is relevant to you.
That is one of the themes we will be watching for today.
We certainly will be.
Breaking news on del.
What can you tell us?
-- pmon dell.
We are getting headlines that michael dell, the founder of the company and silver lake have boosted their bid to take dell private from 13.65, up by 10 cents to $13.75 per share.
Talking about the idea that by delaying the meeting some of the parties may be looking to revise the terms of the deal for what they would do about taking the company out.
Carl icahn also very much involved.
The special committee proceeds of revised share proposal.
The special meeting to be adjourned again now to august 2. they are of value in the the deal with advisers.
They say the meeting has been reconvened today at 5:00 central.
The unaffiliated stockholder approval that michael dell in silver lake have said this is their best and final offer.
This is a big deal.
Not willing to change the bid without some required changes.
They say this is the best and final offer.
Take a best and final offer.
List of 1%. amazing.
Cristina alesci all over this deal.
Joins us on the phone from headquarters in texas.
This is clearly a sign that dell in silver lake needed to do something to get this deal done-- and silver lake needed to do something to get this deal done.
It is not much at all, but what is delaying the vote does is change the record date for shareholders.
There is potential that you have a lot more short-term money in the stock the next time around when it comes to a vote august 2. it seems like they said it up so it really does fall through on august 2. they are changing the record date.
All three things vote for a much better but next time around.
I know you have been in touch with the number of investors.
How you think this will be received?
Investors will be split into camps.
Those that will change their votes in light of the new term, and then those that will hold their ground.
This is not -- bespoken amount is not really moving the needle all that much.
10 cents on a deal like this for some institutional shareholders does make a big difference.
Historically speaking , 10 cents does push people over the line.
He would be amazed what it does for some institutional shareholders.
It probably will not change southeastern, the most vocal opponents of the deal.
There will be some questions raised over profits and how much exactly the special committee went out of its way to steer the deal.
Thank you for joining us from texas at the headquarters.
Michael dell has upped the offer by 10 cents.
They have pushed the meeting back yet again.
That will happen in august.
Going back to chicago, where betty liu is inside mcdonald's. i am excited to see how this all shapes up in chicago.
I will bring you back egg make muffinscmuffins and big macs.
The largest restaurant chain in the world to it -- takes training employees very seriously.
They created hamburger university over 50 years ago.
I went back to school to find out what it takes to get the the oklahoma.
-- to get teh hu he hu diploma.
On the grounds of mcdonald's headquarters just outside chicago, hamburger university has recommended training for all the company managers and franchise owners.
The commitment of investing in employees led to the commitment -- creation of hamburger university.
We have to have talent and i will put my money in the talent.
Unique curriculum that in bides hamburgers and glasses.
Hamburger university is not a cooking school.
On average each mcdonald's restaurant brings and $2.6 million.
The goal is to provide managers with real business smarts.
I have worked in 13 different mcdonalds.
What is your goal?
My goal is to become an owner and operator.
Fred turner and for its kidder have climbed the golden arches.
Paying their dues in the kitchen before hanging up there a plan to become ceo.
That means people like her can be training the next ceo.
They have to think bigger picture.
A lot of times we get bogged down in day-to-day details.
It is about big picture and diagnosing the situation to make it better.
That is a skill taught in one of the class's, which gives students 30 -- 20 seconds to conquer 36 scenarios.
Everything we will do here they run into.
A customer that slips and falls, something burning in the kitchen -- you need the feeling of what it feels like to be in a moment.
Anyone who thinks this is just a week off work, and think again.
This is real college credits take the.
Joining me now for more on mcdonald's and how it ranked is lumber contributing editor come up brand expert and former chief marketing officer at kodak.
Great to have you with us.
Talk to me about how they are training managers.
How the rank macdonald verses other companies in terms of training the next generation of leaders.
That is the american dream.
I worked at mcdonald's in rapid city, s.d., when i was in high school.
I was never smart enough to go to hamburger university and at one point i thought it was good to be a career choice.
They train one in every eight workers.
It is a great place to be able to inject the culture and talk about the things that are most important and watch the students start from the bottom and work their way all the way to c.e.o. or any other kind of jobs.
They are doing an excellent kind of job.
This is a well-oiled machine.
You saw them make mistakes with mcsalad.
Who will eat salad in a cup?
It is a good point, because clearly the obesity debate has hit mcdonald's brand-wide.
People say this is a leader in the industry and should be a leader in terms of healthy foods, but how does it do that when the core products are big macs, french fries, chicken mcnabb gets?
-- chicken mcnuggets?
Why have they become the poster child for trying to be healthy food?
That is not what they are about.
That is what they are about here yen one of the most iconic businesses in the world.
In fact, if anything they represent a lot of what is great about america, in my opinion.
When you go to foreign countries everyone tries to go to mcdonald's. it is like the american embassy overseas.
They need to embrace their core.
That is they are a burger place.
Burgers and fries.
Thank you for joining us.
We will talk to the ceo of the world's second-largest pizza chain, dominoes.
Also, we will go inside mcdonald's with the president and ceo of the fast-food giant.
Don thompson joining me exclusively.
Keep it here on "in the loop." ? you are watching "in the loop." 26 minutes after the hour, which means bloomberg television is on the markets.
Futures are up in the pre- market.
A busy earnings wednesday.
The market is that it just did -- digesting positive.
Vm ware rallying in part due to customers renewal of multi- year licenses.
Broadcom down almost 10% after the project third quarter sales but fall short of estimates.
On the markets again and 30 minutes.
Here is a look at the top headlines.
Apple's verdict is in.
We're still down from a year earlier.
Sales largely flat.
This means tim cook under more pressure than ever to update products and find new ways to return to growth.
Data shows that caterpillar is lagging at the sector this year, causing analysts to lower their earnings estimates.
Shares took a hit last week after jim chinos said publicly the company is being hurt by the slowdown in commodities demand.
Anthony wiener will not quit.
He rejected calls to end his bid to become new york may year, despite evidence that he sent more sex texts and 30 picture over the internet.
This renewed the scandal that drove him from office in 2011. apparently you cannot teach an old ball -- teach an old dog new tricks.
30 minutes away from the exclusive interview with john thompson.
Domino's is another company we're watching very closely.
They delivered a second quarter profits that topped estimates.
But is it -- president and ceo of banos joins us with more.
Profit up 19%. what do you think is the take away for investors?
It is a new dominoes.
It has been a terrific run, a great quarter.
Comps almost up six.
Outside of the u.s. giving great -- giving great growth domestically.
Overall we were thrilled.
The real bing is it is the brands that carry the day.
We did not want this is in the second quarter and still have these kinds of results.
We're very happy with the quarter.
Why do you think investors chose to take the stock down 10% on what appeared to be an outstanding earnings report?
We are almost a double over the course of the past 12 months.
Overall we have generated terrific returns for shareholders.
We keep putting up quarters like thick and this -- this in the stock will take care of itself.
You were on the schorl -- show, a few months ago and brought us a lot of pizza.
I wish you were here today.
We could have that are arranged for you.
Sharing the pizza.
I see it on the side of the set.
What are some of the new products i can look forward to in the commercial break?
To go we will not talk about anything we have not announced yet.
A lot coming on the technology side and products side.
Innovation is not just about the product of the month club, it is about coming out with things that will materially improve the customer's experience, and that may be product or maybe things in technology that allow them to access the brand in a different way, and the way consumers want to do that now.
Play is in the works on that front.
Earlier we spoke with sir martin sorrell, chairman of one of the world's largest advertising agencies.
Here is what he told us about social media.
Let me play you a quick clip and get your thoughts.
Starting to see significant increase in facebook connectivity.
How you use facebook @ domino's? social media is incredibly important.
What people are saying about us and social media is more important than what we say about ourselves.
That is people's friends and families and they trust them more.
We are advertising, buying at banner advertisements, buying of digital media.
It is important what is being said is critically important for the brand in driving brand perception and trial of are picked up.
Do you think this is where the world is going, ultimately digital is more impact full?
Iphones sourcing more merging of digital and traditional media.
Clearly very impeccable.
You are seeing things now as digital moves into the living room, as television get smarter.
All of these banks are coming together.
It is really exciting.
As a brand figuring your way through that, how to get an edge in that is exciting.
I think we are doing it well, and i think you will see the brands to figure that out fake -- perform much better of those who have not figured that out.
We have a ton of pizzas.
We have some pretty fancy stuff.
I want to think you for being here.
-- thank you for being with us.
Next time of to do it in person and eat some pizza together.
It's up for breakfast.
We are inside mcdonald's. -- pizza for breakfast.
I have already down some coffee and egg white mcmuffin.
I will sit down for an exclusive interview to see where the company is looking for growth next.
The pit anniversary of lands end.
They started at selling out by preppy apparel from catalog.
Today they ship to more than 100 countries around the world.
Sears is the parent company.
With more on the evolution of the iconic american brands, i am joined by president and ceo of lands' end, edward hubert.
What has been the consistent died?
Stay close to the customers.
They tell you what they want, what they like and what you should develop in the future.
How do you stay in touch with customers?
We talk to customers on the phone.
We have a lot of internet connections with them.
A very dynamic facebook and social media exchange with them.
They tell us what they like and what they do not like.
Were just talking with patrick boyle who said facebook has become essential.
Can you have a business that does not integrate digital and bricks and mortar?
I do not think so.
I think you have to be very active in social media and keep in touch with them.
They want us to be more on trend appeared in their open to be surprised.
To meet it is the tote bag -- to me, it is the tote bag, the preppy stuff.
How do you make that it here?
-- it edgier?
We can keep what we have and the ball is so it's days relevant.
My favorite is a very fancy leopard cardigan for $49 in september, one of our top sellers.
How did you make a sweater for $49 and make money?
That is our secret.
To get the best quality.
-- the best quality.
Above manufacturing here in the u.s. forces abroad?
It is really impossible to produce 100% in the west.
We produce a lot in the u.s. but also abroad to stay competitive.
It is labor costs, raw material, but mostly being able to handle this.
We're selling over 60 million units per year.
To go sears is the owner.
How has that relationship in?
We a 300 retail locations.
We're within sears stores.
It would have been impossible to get these locations.
We're working a lot on the transport department.
We have agreed prices from in and went -- inbound freight point of view because we put volumes to the other.
We're working on the whole supply chain optimization.
Any regrets or down side?
No, we have a lot to learn.
What is it like to work for eddie lampert?
He is a visionary.
He challenges us every day to be a digital player in the future.
We have advanced dramatically over the past 24 months.
It is under his leadership that we transformed the company.
People have said he runs the business like a hedge fund.
What the big about that?
-- what do you think about that?
." i cannot confirm that.
I've never worked in a hedge fund.
Mild temperatures across most of the nation.
We're all very glad the heat wave is over.
For michael mckee, the real deal is lingering on.
To account wait until you open your july power bill.
Not as bad as you think or fear.
How hot was it?
Not all that bad.
In most places seven straight days of + 90 degrees.
It is no fun, but it is no record.
The power industry has a measure of that.
The energy needed to cool your home to a certain temperature.
We are not out of line.
We had worse in 2011 and 2012. energy -- energy prices soared during events like this.
The good news is again, high demand was relatively short- lived.
You can see the price in spikes.
What will also help as power plants paying less to generate electricity.
A small spike in natural gas prices, right-hand side.
You can see how far prices had fallen before the heat wave began.
In that sense, hold your nose and pay the bill it and be happy it was not worse.
It will add to industrial production and g.d.p.. what is interesting is in spite of the surge of demand, lights stayed on, and air- conditioning.
To go we are all using more electricity.
Everyone has a juice-sucking devices.
-- we are all using more electricity.
About yvette to power 1000 homes.
Utilities have increase capacity and in efficiencies -- and efficiencies.
This is the elegant economic solution to the problem.
To keep cool, pay up.
Coming up, barack obama eight years ago.
That was the first time he spoke about the economy at knox college in illinois.
The president goes back there today tried to refocus the attention on his economic agenda.
Bloomberg television is inside mcdonald's. just 15 minutes away from betty liu's exclusive hour- long interview with don thompson.
A lot happening here on "in the loop." we're glad you are with us.
? in washington, president obama trying to reshape the early debate, beginning with this speech today.
Intended to be a big picture look at the country's economic challenges.
Returning to the site of his first economic speech that he delivered aetna -- knox college.
Obama was a freshman senator in 2005, and times have changed.
A look at denver's is now.
A look at not only the economy, but a story of a man who went from being a junior senator to a president in a very short amount of time.
When you look back at this address in 2005 white house officials say this was the clearest articulation of his economic elites, vision.
What he sees as the most crushing -- pressing issue.
The economic fortunes are tied to the fortune of the middle class.
This idea of growing the economy from the middle out as opposed to a trickle down economics is what you will hear from the president today, the idea that the economy is on more solid footing but then -- that it was back in 2009. we cannot stop now, we have to make sure the middle class is still propped up.
He will hear the president talk about the role of government in prepping-- you will hear the president talk about propping up the middle class.
You studied the 2005 speeches.
What are some of the differences?
Take a 2005 -- 2005, the world was different then.
The things the president talked about then, the issues he addressed really are the same.
America's role in a globalized world.
He looked at the closure of the maytag factory in galesburg and a pack that had on the local economy.
Talk about changing technology, the need for health-care security, pension security.
The president will come back and talk about all of those issues today.
The economy was different also.
Gdp was 3.1 percent that year.
Now projected to be 1.8%. unemployment rate was 5%. now it is 7.6%. the challenge is to try to make this speech relevant, because we will not hear of not -- we will not hear a lot of new policy ideas.
The speeches will all require some sort of movement from congress.
To the 10 minutes away from our exclusive with the mcdonnell c.e.o., don thompson.
Betty liu live.
-- mcdonald's ceo.
Everyone looking forward to this.
I am, too.
Before the interview, i want to give everyone a quick rundown of what macdonald has done.
Growing from a drive-in hamburger shop to a global powerhouse.
They went inside the golden arches to get the story by the numbers.
Take mcdonald's raised golden arches in illinois on april 15, 1955. first-day sales were $366.12. hamburger sold for 15 cents per patty.
Today macdonald speeds over 25 million people and the u.s. daily.
Also a global brand with over 34,000 restaurants in 118 countries.
Every day customers eat up 9 million tons of french fries, equal to the weight of 900 elephants.
There are over 145 items on the menu, but it is the big five that bring home the bacon.
They account for 25% of total sales.
More americans visit mcdonald's than any other chain of any kind, including wal-mart.
It has the grocery list to prove it.
43 million pounds of tomatoes, 102 million pounds of lettuce come and do not hold the cheese.
Mcdonald's is to as high -- 231 pounds of cheese per year.
A tally that adds up to $9 billion.
That is 3 billion more than the military food budget.
They have a bigger work force, too.
They employ more than the army combat marine corps and air force combined.
Coming up at the top of the hour, we will talk numbers and a whole lot more.
I will have that exclusive interview with you -- with the mcdonald's president and ceo, don thompson.
? 56 minutes after the hour, which means bloomberg television is on the markets.
Futures up as we head into their earnings heavy wednesday that we are all enjoying in new york.
The sun finally coming up.
Names to highlight, eli lilly up 3% after beating estimates due to cost measures.
Boosting the year-and forecast.
Boeing up 2%. he estimates increase in the 2014 forecast.
Finally, caterpillar down in the pre-market.
They cut their earnings forecast after posting earnings that trailed estimates due to lack of demand.
We are on the markets again in 30 minutes.
We will be back with don thompson, ceo of the world largest restaurant chain in our exclusive inside mcdonald's. stay with bloomberg television.
We will be right back.
We are live up from oprah, ill., home to mcdonald's headquarters.
You were watching bloomberg television.
I am betty liu.
We are inside macdonald all day today.
This is the world's biggest restaurant chain.
Reporting second quarter earnings that raised concerns about the global economy and where we're headed.
For all of the answers come i am going straight to the source, president and chief executive officer, don thompson joining me for the rest of our work in an exclusive interview.
Great to have you with us.
Nice to have you here with us.
I am ready had my egg white 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.
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.
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 and what we do with technology, the opportunities for them to continue to grow.
They are the ambassadors at the front counter.
We have to make sure they are a part of what ever it is we do.
We have to make sure we have great facilities, great training and great opportunities to grow.
We will talk more to you about this.
Back to school for me here at headquarters.
I will tell you what i learned from taking class's at hamburger university.
? we are live inside mcdonald's. i am back with the company president and ceo, john thompson.
Earlier we showed my run through mcdonald's university.
-- hamburger university.
-- donmt thompson.
I have my diploma here.
It says bachelor of hamburger ology.
Not easy to attain.
Always ongoing education.
Are you ready for the next phase?
We want to talk about that next.
Rick clarke created hamburger university because he wanted to provide a training ground for your response.
Almost 3 million in sales.
Puc an improvement in sales -- do you see an improvement in sales?
What we see is improvement in management.
You did not get a chance to become a restaurant manager until you have qualified by and restaurant training and out of press run training and education.
Everything from people practices, operational platform management, supply chain management -- clearly food quality and safety, what it means to market locally.
What the local community means -- all of these kinds of things, strategic planning to how much labor you have in the restaurant -- all of these things are things managers learn as they are developing.
You learn this as an assistant manager, a department manager.
So we're very girl -- big on ongoing education for managers.
As they move forward to management, than supervision and to the system like the chief operating officer globally.
As i mentioned earlier, the second-largest private employer here in the united states.
People often have the perception that the mcdonald's job is a low-paying low-skill jobs.
You feel a bigger responsibility to make sure there is a pathway to higher levels of the company?
When i started with mcdonald's 23 years ago i came here as an electrical engineer.
I had no idea what mcdonald's meant or what had happened.
Over the past 23 years i have seen amazing things.
40 percent of our executive started as hourly employees.
Over 50 percent of the franchisees', those that own and operate restaurants started as hourly employees.
There was no -- is no other institution that can boast of those kinds of opportunities and success stories across the system.
What we're really about is making sure of regardless of where you came from in life -- some of those people have high- school diplomas only.
Some of them have their mb a's, but every last one of them has the opportunity to show what they can do.
We stand for opportunity, always has.
Also a very diverse system.
We represent those who walk through the people who walk through the doors.
Supplier base, very diverse.
One of the most perverse in the world.
Customers are the check point.
As you are quite aware, in the past week or so the company has been under fire for the financial planning web site that was created a few years ago.
People that were former mcdonald's employees have said it shows mcdonald's is out of touch with the minimum wage worker.
They do not understand what it is like to work -- live on minimum wage?
To go -- i will be kind, i will say i find a lot of the comments interesting.
This web site has been out there about five years.
It was intended to do something very simple, to help someone who might be helping -- entering the work force for the first time for someone who has not had management training to be able to manage finances.
You can go online now and there are 1000 of these kinds of websites out there.
Five years ago to provide something like that internally i thought it was a very innovative idea.
When i was at the denver age, i did not know about financial planning or management.
It really took my wife to help me out.
I would have loved to have something to help guide me through.
That is what the tool was all about.
2 line items for income.
They said $20 unrealistic.
Is is intended as a to-person household.
It is intended to be a tool to help the person plan, regardless of the demographic.
To go what they were saying is it shows whether or not mcdonald's shows it is difficult and impossible in many ways to live on minimum wage in the united states, and therefore, it should be raised in the u.s.. do you agree with that?
Picco i think we have legislators and many people that will determine whether or not it should be raised.
We of 07 and above minimum wage employer and have provided opportunity.
-- we have always been an above minimum which employ year.
We are about providing opportunity.
A lot of people can debate the entry-level point.
We will continue to provide entry-level jobs.
There was a time one of every 10 people have worked at mcdonald's. would we can provide the number of jobs we can and when we can help people to hell have a viable income, we will provide that opportunity so the person can rise to the system and gain greater and greater wealth.
This is not about a tool, not about whether or not it is about the minimum wage.
Would we do that, we will continue to grow and take care of our people.
I know you will return in a few minutes.
-- thank you.
Will talk about the product innovations.
Back with don thompson, ceo and president of mcdonald's. inside macdonald all day today.
Inside mcdonald's will continue in just a moment, but first, bloomberg television is on the markets.
And dominic chu.
Taking a look at how things are shaping up in the opening bell.
One thing we're watching is the s&p 500 just about flat.
The nasdaq up 30. those reports in focus.
Michael dell in silver lake have increased the buyout to $24.6 billion.
Michael dell has said in a statement this is their best and final proposal.
The company has delayed a vote until august 2. with that come back to you at mcdonald's. -- with that, back to your web mcdonald'u at mcdonald's. back with don th ompson, ceo and president.
We are showing the video of me making the mcwrap for you.
I was ok when i woke up this morning.
Food safety is critical importance to us.
I made sure to appear to your guidelines.
This has been a big deal for your restaurant.
You had to add in the new vegetables.
Cucumbers for instance.
What is your goal here?
How big do you expect it to be?
I think it is a great platform.
Almost like a portable satellite.
Great, a fresh vegetables and produce.
Shredded lettuce, 16 variety lettuce mix.
Sliced cucumbers, and grilled chicken or crispy chicken.
The party itself.
Rice, wine, vinegar all great products.
-- the wrap itself.
You said last year the menu seem to lack energy.
You did not want to repeat that.
What was wrong?
It is always about opportunity.
Some of the opportunities for products around the world like the mcwraps that originated in poland.
To come to the u.s. is a great on strike to introduce new vegetables.
We want to focus on some of the key growth areas, beverages, a breakfast, chicken products.
In a bit of the entrees -- inovative entrees.
That is why you see egg white delights.
We have to remind customers that we have real fruit smoothies.
It is pureed fruit.
May go pineapple.
These things are really great additions to the menu.
I noticed you use the word real emphatically.
People say mcdonald's is not real food.
How does that make you feel?
Love to cook.
I am ok at it.
My family says i am ok at it.
I understand great produce, a great protein.
I visit our suppliers.
We have tremendously high quality we have a huge grocery list that gives us leverage in terms of buying power.
How can consumers still say it is not real food?
People need to get to know who we are as for donald.
-- as mcdonald's. when they say you meet your beef is 100% real beef?
Your chicken, yes, it is.
It is breast meat chicken and whole muscle breast meat chicken.
Is is why you're adding in the egg whites?
Is this your emphasis of saying you are trying to offer healthy food?
Health will be determined by the person who decides to buy it.
I will tell you, yes, more fruits and vegetables is part of our plan.
I would say you a big mac, two all beef patties, lettuce, cheese, pickles onions on a sizzling seed bun, it is all real food.
. it is all very fresh food.
Because of the number of people we serve, it is not get fresher.
Our eggs -- i challenge you will sometimes and i say how long have your expert in your greater -- in your refrigerator?
People do not know.
If you get an egg from us, is one of the freshest you'll ever have.
Our suppliers are household names.
They are the cargills of the world.
We all buy from them.
We happen to be a pretty big customer there.
I want people to understand as mcdonald's, we have always supported high quality food and support farmers.
What we provide is great taste to our customers.
That is what we will keep providing.
Some of these new entrees showed off a logo more.
I like it when the lettuce comes out of the top of the rap and you go, wow, this is pretty would -- pretty good.
At the annual meeting, you have question after question including a nine-year-old girl who asked you why are you marketing fatty foods to children and why are you increasing and encouraging the obesity problems in america?
Do you feel you're going to keep getting the question asked you?
There are a lot of questions will keep getting.
We are a lightning rod because of our size,. we will keep answering the questions.
I think the bigger perspective -- i go back to a comment i made.
I would offer to any of our customers and consumers in general, get to know mcdonald's and your own research, your own data.
Don't listen to what someone says and don't listen to just what i say.
Do your own research.
I think what you will find you understand this is a broader issue in the world, broader than mcdonald's. some responsibility is to encourage americans to eat healthier and to help reduce the obesity problem?
There is a responsibility we have as a socially responsible business to be able to help people -- our customers realize they have opportunities to get whatever does they like to get.
Also, that yes, we can help the change.
We have done that.
We have added more fruits and vegetables and change our milk.
We try to make containers more appealing because children -- they can drink more milk am a this would help from a calcium perspective.
That is an area that is a distortion thing -- a deficiency.
We have done a lot of things.
We will continue to try to do more.
When parents say you are marketing fatty foods to my kids, what you said to them?
I say what is the last time you saw ronald eating food marketing to your children.
You have not seen him do that.
That was a big thing, people attack while mcdonald, who was ever presented for the charity.
You have never seen while do that.
He is a clown.
He represents our charity.
You have not seen that.
The average person eats at mcdonald's 3-4 times a month.
Here is a question just -- i am a parent of two children.
I know what my kids eat and i know what i allow my kids to eat.
I would bring my kids to mcdonald's then and i will bring them now because the food is high-quality, safe and they have choices.
If my kids want to have fries, i will my kids have fries if they are active and if they are moving.
There is nothing wrong with having some fries.
Burgers and fries are an american stable.
By the same token, my kids have eaten vegetables and they have no choice but to eat them.
I would just offer to all of us, get to know what we have.
We have a great side salads.
They don't represent a lot of our sales but we have great salads.
We have a snack wraps and smaller sizes.
We have apples and movies.
-- s moothies.
On that note, we will dig a quick march break and be back more with don thompson, the chief executive of mcdonald's. we will be back in two minutes.
? we are back with the mcdonald's president and ceo, don thompson.
A couple months ago, you were speaking at a conference and during the q and a session, someone asked you about this obesity question question.
You shots back and said -- i want to pull up the quote.
You said i eat at mcdonald's every single day in the last year or so.
I am down about 20 pounds.
I got up and started working out again.
All of us have to make personal choices.
You lost 20 pounds while eating mcdonald's everything ok.
What did you eat?
During the week, i am here everything ok.
On the weekends, sometimes if we are out, i always stop in the restaurant.
I will tell you what ie is -- i am almost -- all over the menu.
I will have an egg white the light one day, the way with canadian bacon.
Another one with a sausage patty.
Some days, i will have oatmeal.
I've got to try a hash brown every now and then.
The exercising -- it was a comment i made about me.
It started getting taken out of context.
What was taken out of context?
Everyone has to make their own personal choices.
I made a choice because i was traveling a lot and a lot of things going on.
I used to work out more and i had fallen off the wagon.
I began to work out more.
It helped me tremendously.
As i began to do it, i began to feel better and i will tell you mcdonald's for lunch some days i would have a southwest salad and some days a big mac.
Some days i will have fries because i can't give a fries.
I will go extra on the treadmill on the elliptical.
I probably have fries a couple of times a week.
Large, smart, medium?
Just depends on the day and what i have got going on.
These days, if i'm in a bunch of meetings, it might be a small order.
If i am running around a lot, it might be a larger order.
When they hear you eat at mcdonald's every day and you lost weight, how's that possible, can you understand what why people would be startled by that?
Let me tell you why.
If i said i ate at a fine dining restaurant every night, and i managed to lose weight, ok.
Now, if i am out and i have a pretty big state -- s teak or a rack of ribs with great food, if i'm having that late at night, i might put on a few pounds.
The surprising part to me is that again as mcdonald's come a we are a beacon.
When people say, that possibly being?
-- be, we post our nutritionals and caloric content.
You have mentioned in france the people cook with butter all the time.
It is great tasting food.
If i am in france, i'm going to have a great dinner whether it be at a mcdonald's restaurant or another establishment.
My point is this -- everyone has -- it is calories in, calories out.
You have to watch what is you are putting in angela s level of activity.
I wanted and it tastes great.
Customers want great tasting food.
I have been eating at mcdonald's for a number of years.
I do better when i am eating at mcdonald's than when i am off doing something different.
You said something interesting when you said you are a beacon for these issues and obesity is one of them.
Coca-cola is as well.
These are companies that are giants in their own industry.
When people say and attack mcdonald's, they're looking for you to leadership and guidance.
Do you think the fact that you will always sell the backs, always so french fries illegitimate nuggets, there is not a way for you to win this -- chicken mcnuggets?
I don't know what we will be selling 10 years from now but it will be what customers want.
We are restaurant business and customers are our business.
They don't want salads, they want workers.
If we don't sell them in the traditional way, maybe we can sell them in a wrap.
For us, it is about how we satisfy those -- and there are customers that are saying how many calories are there and where did it come from?
Give us some transparency.
These are things we have always done.
We know where it comes from.
Do you make money off of salads?
We make money off of products that most -- most that we would serve in a restaurant.
We can make -- we sell ourselves at a lesser price than where you would buy in most places.
We are able to do that.
No one else has a dollar sized salads.
For a small child, if your children and joy salads, you can come to mcdonald's and get a salad for a dollar.
Where else can you do that?
Or a cheeseburger for a dollar.
We will be back and talk about international expansion.
They are opening their first restaurant in vietnam.
We will be back with don thompson, the mcdonald's ceo.
? we are back with a don johnson, the president ceo of mcdonald's. in just a few hours, the president is going to be making a speech to reshape his policies.
He is going to talk about the improvement in the economy.
What do you hope to hear from the president in these remarks?
In a few hours, i will be speak into a group of our franchisees from across the united states represents our leadership.
Would i expect to hear or hope to hear, that there is a sense of optimism about the economy , about job growth, about household earnings continuing to go up and more jobs being produced, which is really the footnotes of it.
We need more jobs and a stronger economy, stronger gdp growth.
Hopefully those kinds of things will come forward.
The discussion about what has gone on in congress and the white house has added to uncertainty for many ceos.
Have it added to uncertainty for you?
We have a consumer-based business.
Every day is slightly uncertain.
Customers come in with different expectations everyday.
We had to be able to manage through and make sure we provide things they want.
Relative to the broader macroeconomic conditions around the world, we have too managed through has there been more uncertainty?
There is a hesitancy to invest.
We have a delay in healthcare.
We stay in touch with all of our owner operators.
I don't have a determination -- if we are ready, they made a determination.
We as a system have been having a lot of conversations with our system as a whole.
If there is a delay -- we will abide by that and move within.
The president will speak to why there is delaying but i don't know.
I will be honest -- my focus is on the golden arches.
When i had the chance to visit washington dc, i will make comments based upon the system.
Ours is about those restaurants and customers.
The president has called upon various ceos for advice.
Has he called upon you?
There has been a couple of conference calls on have set down with the.
What would you advise the president and the rest of his term on economic policy?
I am not an economist.
What i would recommend would be the things that will support our business and that is, if there is economic growth, if there is job growth, those things we know from a mcdonald's perspective make for a more vibrant economy.
Those things make for robustness and discretionary spending and that makes for a stronger mcdonald's. as well as a stronger more eating out business will stop that is what we desire.
I think that it has to be sustainable economy.
It cannot be a blip.
I think that is what the administration and what the house and the senate are working on.
I am not their daily and i don't want to be there daily.
You want to be here.
Don, thank you for staying with us for the hour.
Thank you for hosting us at your headquarters.
It is our pleasure.
Stay with bloomberg because we are inside mcdonald's all day today with our exclusive coverage and will return in two minutes on " in the loop." ? bloomberg is on the markets.
I'm dominic chu.
Take a look at what is happening over all with the picture for stocks.
It is a pretty unchanged today again as the dow jones is down 15 points.
Apple earnings were out last night.
Let's check out ford.
The company beat estimates and raised forecast.
The ceo says a statement over the next several years of operations will take on more significance.
Also, caterpillar, the company missed estimates.
It is considered a global fairweather and some analysts see investments as week.
Crude oil has seen some interesting happenings over the past few weeks.
It is today's topic.
Joining us is alex cole.
Let's talk about what is happening with the prices overall for wti.
It is a fancy way of saying the u.s. a benchmark for crude oil.
Over the last few years, we have seen a triangle develop.
There has been a significant break to the upside over the past few weeks.
Weaves a triangle, this is the chart.
It is outlined by purple lines converging to one point.
Now, they have gone outside of that triangle range.
It means of the last few years we have had a battle between buyers and sellers.
It looks at the buyers have overwhelmed the sellers.
As we look at what is happening, we know about fundamentals.
It is supply and demand.
There are geopolitical risks involved.
If some thing happens in the middle east, oil prices go higher.
Why is it that charts are so compelling this time around and what else are you saying that mixing believe there is an up trend in playing?
A thing i am looking at is one of the most popular communicators, the movi