McDonald's Chalks Up Its Very Bad Year to Widespread MisunderstandingsBy
McDonald’s is having a very bad year, and executives believe at least part of the blame is that the world’s biggest burger chain is misunderstood. The troubled financial results reported on Tuesday only added to the dark clouds around McDonald’s: Sales fell 3.3 percent in established U.S. restaurants last quarter, and overall profits dropped 30 percent.
“By all measures,” Chief Executive Don Thompson said in a statement, “our performance fell short of our expectations.” In a call with analysts, Thompson used the word “aggressive” an awful lot: McDonald’s is moving aggressively, looking aggressively, and assessing its aggressiveness.
To lure back customers seeking healthier, fresher, and custom-made food, Thompson said McDonald’s will let its restaurant owners make more decisions about what to sell. Autonomy, he said, could mean chorizo burritos. McDonald’s is also giving customers the chance to “personalize” their burgers with an initiative called Create Your Taste. And while it’s doing that, McDonald’s is going to simplify other parts of its menu so that service doesn’t slow down too much.
A new president of U.S. restaurants, Mike Andres, will oversee all of this. He used to work at McDonald’s and was hired back recently from Logan’s Roadhouse, a steak and burger chain. He will be the third executive in this role in four years. McDonald’s hired a new head of marketing this year, too. One of Deborah Wahl’s priorities, Thompson said, is to “convey facts and address misperceptions about the health, freshness, and integrity” of the company’s food.
Maybe you’ve already heard about McDonald’s latest marketing campaign: Our Food, Your Questions. “This is a way to tell the truth about McDonald’s and its supply chain, which is absolutely fabulous,” Thompson said. Elsewhere in the discussion, he did note that McDonald’s problems with its beef and chicken supply in China led to a 22.7 percent decline in sales in the third quarter and it would be another six to nine months before the financial situation “normalized.”
McDonald’s thinks it’s misunderstood. But the real problem is that McDonald’s is big and its food is processed through what executives refer to as the System. That just doesn’t sound very tasty. Indeed, Thompson didn’t say anything specifically about taste today even though a reader poll by Consumer Reports this summer ranked McDonald’s burgers as the worst among fast-food chains.
As for conveying facts about the food, questions asked so far as part of the McDonald’s marketing campaign have included:
Do you use real chicken in your Chicken McNuggets? Yes.
Are your eggs real? Yes.
Is your beef grass-fed? No.
McDonald’s, in case you didn’t know, doesn’t serve any whole-wheat bread or gluten-free food, and its French fries still aren’t vegetarian. As for using organic produce and meat to improve the chain’s image, Thompson demurred: “We are offering organics in certain markets, but it’s not the main driver. If it were, we wouldn’t have as many customers as we have.”