More than 80 years have passed since McDonald`s entered the market for the first time. It is now the largest chain of fast food restaurants worldwide and one of the most successful and renowned brands in history, especially because of its hamburgers and french fries. McDonald`s is the world`s second largest private employer and has annual profits of billions of dollars. With more than 36,000 restaurants open all around the world, it`s easy to imagine why.
However, like all big names on the international market, the restaurant chain does not ascend continuously. Sometimes, even the most common, ordinary things, things that you are accustomed to like for example McDonald`s hamburgers need a change. And the most significant changes a global brand like McDonald`s can make are in reference to their image.
The company has presented their situation in February`s sales reports. Officials say McDonald`s sales have dropped globally with 1.7 per cent. This result is worse than the one expected by bot the company and the analysts. It seems like new chief executive officer Steve Easterbrook will have some work to do in order to get McDonald`s back on the right track.
February sales reports:
The U.S. sales are down by 4.0 per cent
In Europe, sales have risen by 0.7 per cent
Asia, Pacific, Middle East and Africa (APMEA) sales are down by 4.4 per cent
These discouraging numbers are due to some problems McDonald`s faced lately. Officials say the U.S. sales have dropped because of an aggressive competitive activity, but they chose not to comment further on this matter. After thirteen months of no profit raise in the U.S., McDonald`s sales were up by 0.4 per cent in December and January. But the company reported a 4.0 per cent decrease in February.
In Europe, sales have risen the most in the Great Britain and in Germany, and it was enough for the company to end February on profit, even if sales in the Russian Federation dropped.
When it comes to Asia, things are more transparent. The 4.4 per cent drop in the region comes after a 13 per cent decrease recorded in January. The rationing of french fries in Japan and Japanese customers complaining for finding various objects in their food could not have been good omens for the American fast food chain. This is how McDonald`s lost 186 million dollars in Japan. There were problems in China as well. Shanghai Husi Food Co., which is a major meat supplier working with McDonald`s, was the protagonist of an old meat repackaging scandal in July and the restaurants are still trying to recover from this.
There were positive results in Australia.
There are several actions that McDonald`s announced to take in order to reinvent the brand`s image and stop the decreasing sales. They plan to stop serving chicken that are raised with antibiotics in the U.S. restaurants.
“Consumer needs and preferences have changed, McDonald’s current performance reflects the urgent need to evolve with today’s consumers, reset strategic priorities and restore business momentum.”
was the message the company communicated.
Another change that McDonald`s plans to make is to integrate the Create Your Taste program. This would allow the customers to personalize their meals, by choosing what ingredients their sandwich should be made of. The company estimates that nearly 2,000 out of 14,000 restaurants in U.S. will be able to offer such services until the end of the year.
“The goal going forward is to be a true destination of choice around the world and reassert McDonald’s as a modern, progressive burger company.”
officials said on Monday.
Analysts predict that the new campaigns led by McDonald`s will emphasize the food`s quality and some classical advertising hits like love-based publicity. Actually, they have just ended a campaign which allowed the customers to pay with lovin`. Random consumers could pay their meals with hugs and fist bumps during a two-week promotion.
“It’s interesting that McDonald’s had a ‘Turnaround Summit’ last week in an effort to address its U.S. sales decline. The focus for the fast food chain will be on enhancing the restaurant experience, which it hopes will help curb the decline. The fact that the firm has openly stated this in their monthly sales statement and used the word ‘turnaround’ gives greater weighting to the issues they are facing.”
says Joshua Raymond, an expert in market strategy at City Index UK.
Experts say that new chief executive officer Steve Easterbrook should center on five main proceedings in the months to come.
First of all, McDonald`s should focus on hamburgers and french fries. Almost nobody goes to McDonald`s for theirs salads and wraps.
“McDonald’s needs to return to its roots. It needs to make the best burgers and fries that can possibly be imagined. And it should leave the salads and lattes to competitors who make them better.”
says Bradford Hudson, a Boston College marketing professor.
Secondly, McDonald`s should improve its food quality. Everybody is concerned with what the ingredients used to cook the meals are, not only organizations whose interests are in this segment. They should promote simple ingredients that give customers comfort.
Thirdly, McDonald`s should be regarded as a good deal by its clients. Enough with the expensive burgers and salads. They should not forget about the value component, thinks Jeff Davis chief operating officer at Sandelman & Associates.
Even more, McDonald`s should choose a universal design for its restaurants. Nobody knows what a McDonald`s restaurant looks like nowadays, because they are all so different. Some are white and red, some of them yellow and some look like a coffee shop. They should choose a design and stick to it, preferably one that appeals to youngsters, says Linda Lipsky, who is a restaurant industry consultant.
Finally, the employees should be lovin` it as well. It is well known that “happy employees provide great service to happy customers”, says University of California hospitality professor Robin Dipietro. She reckons that McDonald`s should hire the best hand, train them as well as they can and pay them so they are happy with their workplace.
Image Source: Huffington Post
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