“They need to concentrate on what they do and do it extremely well. There are some people you just can’t service. If someone really wants kale, they probably aren’t going to go to McDonald’s”
McDonald’s Canada launched the Create Your Taste program with customizable hamburgers and gourmet toppings such as blue cheese. Regional programs in the US, such as the Chicagoland Burger
Build Off, have invited contestants to propose all sorts of new things between the bun. The Rio Crisp, a finalist for the ultimate Chicagoland burger, is a quarter-pound beef patty on an artisan roll with creamy peppercorn sauce, guacamole, red onions, tomato, lettuce, pepper jack cheese and chili-lime tortilla strips — a long way from the original Quarter Pounder. “What this does is it creates a more localized flavour,” says
Darren Tristano, president of Technomic Inc., a Chicago con- sulting and research firm specializing in the food industry. He likes the idea of regionalization. “It allows customers to co-create product and builds a lot of awareness. It helps [the company] better understand what customers are expecting from McDonald’s.” “So far,” he adds, “I think Easterbrook has made some good decisions.” Others say McDonald’s should not try to be all things to all
people. Friend, for one, is in the back-to-basics camp. She ap- plauds ongoing efforts to improve efficiency from an opera- tional standpoint so that customers can still get their food fast, and advocates paring the menu down to the things that helped the company conquer the fast-food market in the first place. “Small improvements, like the changes they’ve made to the Egg McMuffin, are good examples of how I would see things going forward,” she says, referring to the return of the original muffin recipe and going back to real butter instead of margarine. David Kincheloe, a CPA and president of National Restaurant
Consultants, based in Golden, Colo., believes McDonald’s should focus on its core strengths and forget things such as table service, which it is now testing in some markets. “McDonald’s is a quick-serve restaurant,” he says. “They need to concentrate on what they do and do it extremely well. There are some people you just can’t service. If someone really wants kale, they probably aren’t going to go to McDonald’s.” Although Kincheloe’s consultancy focuses on helping
smaller restaurants refine their menus, he has one bit of spe- cific advice for the big guys in Oakbrook: bring back the beef fat. In 1990, with awareness running high about the dangers of cholesterol, McDonald’s announced that it would stop cooking its fries in beef fat and switch to 100% vegetable oil. While the company is not likely to reverse that decision, people old enough to remember the original recipe may agree that he has
30 | CPA MAGAZINE | MARCH 2016
a point. “That gave the fries a great taste,” he sighs. “Now their fries are just not what they should be.” One thing the experts seem to agree on is the benefit of the
all-day breakfast, which was launched last fall in the US, with the company saying it had no plans to make a similar move in Canada at that time. While some US franchisees have com- plained about the logistical challenges of serving breakfast all day, it has been a hit with consumers, especially young people. The idea was conceived before Easterbrook got to head office, but he is credited with pushing it forward. The move is thought to be a boon to US sales, which showed their first quarterly increase in two years in the third quarter of 2015. “I’m beginning to see some other good things, beyond just breakfast,” says Gordon, adding that he believes Easterbrook has the right philosophy about regionalization, both in terms of menu items and company structure. Wall Street seems to be lovin’ it too. When McDonald’s
reported its fourth-quarter earnings in January, showing an increase of 5% in same-store sales globally, the stock hit a new high of US$121.90 a share. Easterbrook said, “As we enter 2016, we expect continued positive top-line momentum across all segments.” Despite the positives, however, it’s too soon to say whether Easterbrook has turned things around. He’s only been in the big chair for a year, aſter all, and has a lot on his plate running a global fast-food empire. Challenges include restive franchisees, upward wage pressure in the US, an EU investigation into the company’s European tax practices and a worldwide supply chain that sometimes goes awry. Potential customers in Asia are said to still be wary aſter a 2014 scandal, when a supplier was found to be selling expired meat. And because McDonald’s is so big, that kind of bad news makes headlines around the world.
“McDonald’s didn’t get into the situation that it did in a short
period of time,” Gordon says. “Conversely, it’s going to take some time to get out of it. It takes a long time to convince people, to change market perceptions. It’s going to take additional years for McDonald’s to get back to where it wants to get to.” “I’m not sure I would call it a turnaround at this point,”
echoes Tristano. “It’s taken some time for Steve to start making some changes. But so far I think he’s made some good decisions and started the process back to growth for McDonald’s.” The verdict is still out. But while the industry watches and
waits, it’s so far, so good for Steve Easterbrook. SUSAN SMITH is a Toronto-based freelance writer
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72