Does Mc Donald's Deserve A Break?
BUSINESS WEEK missed the new news at McDonald's USA in "McDonald's: Can it regain its golden touch?" (Cover Story, Mar. 9). There is significant evidence of improvement in an already strong U.S. business. Same-store sales were positive in 1997, a trend that continues in '98. Market share grew in '97, reversing a highly reported slight decline in '96. Owner/operator cash flow increased in '97, and management, personnel, and structural changes are starting to have impact.
The investment community is starting to recognize the improvement: The stock has gone up over 14% since the yearend close. Perhaps others will see the real story unfolding and report it.
Jack M. Greenberg
Chairman & CEO
Oak Brook, Ill.
Your article indicated that there are virtually no alumni from the company running other organizations. There is one major exception: Donald Smith, the chairman of Perkins Family Restaurants and Friendly Ice Cream Corp.
Through the leadership of Smith, who was the former chief operations officer of McDonald's, Perkins and Friendly's are leaders in the family dining segment of the restaurant market. As a director of both Perkins and Friendly's, I generally find Smith and his management teams either out in the field working with restaurant operators or in the company's test kitchens devising new menu items. It is this close attention to customer satisfaction that has permitted Perkins and Friendly's to report revenues and earnings consistently above restaurant-industry averages.
Steven L. Ezzes
Perkins Family Restaurants
Friendly Ice Cream
I am a McDonald's franchisee from Richmond, Va. I have been one for 15 years. McDonald's is the most successful franchising system in the quick-service restaurant industry. As of Mar. 3, we have more restaurants, more sales, more customers, higher average volume sales per unit, higher transactions, and higher profits than any other competitor in our industry. Our nearest competitor, Burger King Corp., has less than one-half of the market share we have.
There are 100 successful owner/operators like me for each unsuccessful, disenchanted operator. Cover both sides, not just the sensational side.
I am your normal 13-year-old fast-food customer. My 8-year-old sister and I eat fast food at least four times a week. We don't like McDonald's food or its quality. In fact, it is less than one mile from our house, and we drive past it for other fast-food choices. We also don't think McDonald's is a place that is safe for us to be in or around. Having good food is important, and we are not interested in free toys, playgrounds, or what the brand used to be.
I find McDonald's, including the new establishments, to serve tired food in remarkably dirty establishments, served by people with an uncanny propensity for messing up your order after they make you wait for no apparent reason. Chief Executive [Michael R.] Quinlan obviously understands perfectly: McDonald's doesn't have to change; their customers are doing that for them.
McDonald's may be losing market share because of its lack of variety and stronger competition. But the reason my family and friends avoid the golden arches is because of lousy service. Sour employees in unkempt uniforms, dirty tables and counters, and sloppily slapped together Big Macs are the norm.
I worked at a McDonald's throughout high school in the mid-1980s. Back then, we all took pride in our work. Hamburgers were centered on the bun, the fries were never served a minute past their prime, and mistreating a customer meant looking for another job. That pride and service is gone.
Powder Springs, Ga.