Posted on 04/23/2015 1:22:19 PM PDT by SeekAndFind
You probably saw the story yesterday that McDonald’s had yet another rough quarter, with sales down globally yet again. I didn’t think it was worth blogging again after reading this part, but please indulge me before we get to the good stuff:
Shares of the fast-food company were up almost 5 percent in early trading. At midday, they remained 3 percent higher at $97.70 as investors shrugged off declines in quarterly earnings and sales.
McDonald’s global sales at restaurants open at least 13 months fell a worse-than-expected 2.3 percent in the first quarter, and the company warned of another drop in April.
Net income tumbled 32.6 percent to $811.5 million, and revenue was down 11 percent at $5.96 billion.
No biggie — Wall Street had already priced in another bad quarter, but maintaining confidence that new CEO Steve Easterbrook is busy working on a turnaround plan.
That was certainly my position (I’m not a shareholder) on the matter. Easterbrook would, I assumed, pare down the menu, maybe improve the beef, and (please! please! please!) put the beef tallow back into their formerly world-class french fries. “Wait and see” seemed to be the prudent thing to do before blogging one more time about McDonald’s.
But I can tell you right now: McDonald’s is almost certainly doomed. Or at the very least, Easterbrook is the wrong guy to head up the burger chain — any burger chain, for that matter.
To understand why I’ve come to this conclusion, read the very next line from the story:
Easterbrook plans to unveil his plan for turning McDonald’s into a “modern, progressive burger company” on May 4.
Now maybe I should withhold judgement until I see this plan next week. Maybe a bold headline like “McDonald’s Is Doomed” is just the kind of baseless clickbait fear-mongering I try to resist indulging in.
But a progressive burger company? Really?
How about a barber shop with shampoo laced with Nair? No, that doesn’t seem like a good idea to you? Let’s talk about it at my bar, where I water down the scotch. No, you’d rather not? Well, that’s how I feel about a “modern, progressive burger company.”
A progressive burger chain is like a quiet rave, a smoke-free poker game, or a free & fair Chicago election.
A burger chain serves up the sandwich version of meat & potatoes — the very antithesis of “progressive” anything. A fast-food burger is supposed to be simple, hearty, wholesome, perhaps-not-entirely-healthy fare designed for families on a budget and on the go.
It’s not wraps. It’s not tofu. It’s not sprouts. It’s a burger and fries, ably prepared from decent ingredients at a price that encourages people to indulge. In short, it’s nothing of which Michelle Obama is ever going to approve — not that there’s anything wrong with that.
Maybe I’m wrong. Maybe Easterbrook is misusing the word “progressive” just as badly as American “progressives” do every time they use it. But I doubt it, at least until Easterbrook’s plan is revealed.
But how “progressive” will his plan turn out to be?
This shouldn’t be rocket math. Progressivism has come to mean top-down, pre-engineered, overpriced, “we know what’s best for you,” nannystatism — which is not what I consider to be a fun meal with the kids.
A fun meal with the kids is decent, fast, inexpensive dining on American food. There’s nothing “progressive” about it. And any attempt to force that square peg into the round hole of our hungry mouths is doomed to failure.
Would it surprise you to learn that Easterbrook is a Brit?
Me, neither.
Meet you at Steak ‘n Shake?
That market niche has pretty much been left empty, it's crying our for someone to fill it.
I don’t care for Wendy’s burgers so I haven’t eaten there in 10 years. I like Hardee’s burgers the best, especially when they have one of their jalapeno-type burgers. But their fries are so-so.
I wish 5 Guys Burgers would expand. Now there are some great burgers and fries that are worth the price. Johnny Rockets is pretty good, too.
A few people have mentioned greasy fries but at the McD’s where I live, they’ve always been hot and crisp.
You are correct they are clueless. The CEO for sure maybe a bunch of others in the company. McDonalds is or should be about cheap to medium price food quick and clean restrooms . Nothing else. The food should taste good nothing else. No fancy diet issues should be considered . They are a cheap burger joint the more they focus on that the better for them. For the record I eat at McDonalds about 3 times a year.
Road trips I know what I am getting and want it fast.
Not Steak ‘n Shake. The last time I was there I felt like I was auditioning for a remake of an old Burger King commercial. “Where’s the beef?!?” I leave more cracklings in the pan when I make a burger at home than was on that crummy thing from Steak n Shake. That and out of 6 orders they got exactly none right and even screwed up half the corrections. The kids liked the shakes but they weren’t as good as I remembered when I was a kid.
as for McDonalds, I go there as a last resort but I would go there before I’d go to Steak n Shake again.
Instead you have this monstrous menu
they could also automate the order menu -- put touch screens at different places so people could order on their own and pay by card or cash. They could also automate more of the "cooking".
The Five Guys near my home is cooking the best burgers I've ever had.
They're doing it right. A simple menu; hamburger, cheeseburger, bacon cheeseburger, single or double made from hand rolled patties and cooked quickly on a super hot grill, leaving them nice and juicy. Assorted fresh toppings to choose from. Great fries, more than you can eat, Cajun or normal seasoning. I think they offer hotdogs for the kids. Fountain drinks. And that's it.
The only thing they're missing are milk shakes.
Five Guys is where I go when I am craving a bacon double cheeseburger. Nobody is making them better.
Also, they've never screwed up my order. Lettuce, tomato, grilled onions, mustard, mayo. They've never gotten it wrong.
Name some businesses that have been around for 100 years. Now how many are restaurants and retail? Its not that easy.
McDonald’s as a franchise business is now over 60 years old.
The world it expanded into was ripe for the picking and for whatever reason, Americans of the 60s-80s (especially kids) loved the simple menu.
Things change and McDonald’s is not where you go if you have a real hankering for a burger. McDonald’s is now in competition in most locations with business that offer a lot better menu. Midlife changes McDonalds made included adding breakfast, which is probably where they now compete best, and getting on board with the drive-through concept. Chicken nuggets were also a big hit, until much better chicken strips were offered by competitors. Although they weren’t first with drive-throughs, they so outnumbered the competition at the time that they still leapfrogged them.
I think McDonald’s biggest problem is their bread. Its so light and refined that it has a nothingness quality to it, that makes you feel like you’re eating something from Litte Debbie’s. My guess is that in the 50s-80s, this was a plus, but pallets have changed and its now a negative. America’s bread pallet has followed its beer pallet. All American beer had moved to the lightest, least bitter, most refined lagers/pilsners. Pre-prohibition that was perfection and everyone loved it. By the ‘80s people had really tired of it, or at least the lack of diversity.
Although they play around with a different sandwich now and then, McDonalds shows a huge reluctance to move away from or supplant their mainstays, and I think their last big success was the aforementioned McNuggets.
The very size and geographic scope of their franchise limits their ability to change. Because its no longer a one size fits all market, proposed menu changes always meet with resistance from a sizable segment of franchisee owners, and an item that might do fantastic in 15% of the franchises has no chance at all of getting on the menu.
Fast-food is no longer cheap food and a family will drop $30 on four combo meals. Packing a meal for the road, grabbing a smaller snack at the gas station, or investing slightly more in a nicer sit-down meal at somewhere like Chipotle or Paneras becomes more appealing. Even grocery stores are a good choice for family on the go, with tastier packaged meals from their deli. Better to spend $40 and have a relaxed lunch with an upscale feel, than spend $30 on a less than satisfying stomach brick eaten in the car or a cafeteria feel dining room full of 1-star clientele.
My opinion is that McDonalds is too cumbersome to change in the way they need to, and it will slowly be reduced to a niche market.
Don’t go there....
it’s more addictive than crack.
My opinion is that McDonalds is too cumbersome to change in the way they need to, and it will slowly be reduced to a niche market.
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They changed some of their top management in the last couple of months. It
will take some time for any major changes to filter down to the local store level.
My point is concerning the franchise type structure, not the management.
Not every franchise is in trouble, and the ones that aren’t won’t be warm to change.
And the change that is needed may be different in Bangor, Maine than it is in San Diego, California; yet, McDonalds is almost uniformly a monolithic homogeneous experience. That is there prime directive.
That’s what built them in the 60s and early 70s. Then they started expanding. They kept the focus on fast, and thought they kept focus on quality, but things changed. That’s the big problem McDs faces now. They used to be the best FF place, highest quality (grading on a curve, honestly the food was crap but their competition was worse), good value, and fast. But American cuisine has gone through a major change in the last 20+ years, and in the last 10 FF has gone through a revolution. Without actually changing their quality McD has gone from the top to the middle, because a bunch of new “fast casual” (fast food without the factory atmosphere) places have opened that have better food. Thanks to the fast casual revolution there is now fast food in the world that doesn’t suck, it’s actually good, they don’t need to be graded on a curve anymore. Which moved McD from an A to a C.
There really isn’t the old McD market niche anymore. The American people just aren’t into crappy but fast anymore. They have too many other options, too many places aren’t much slower but much better. Not to mention how that focus on speed rendered things impersonal. 60 seconds at the counter doesn’t leave much time for being friendly. McD needs to change with the time, fewer employees, slower times, better food. It would also help to admit they messed up, that went pretty well for Dominos.
Yum. I love it. But it’s pricey for Burgers. Last time the four of us ate there is was close to $50.
I like the value menu buffalo ranch chicken sandwiches and the sausage biscuits .
Me too and I'm tired of Taco Bells asking for donations for charities.
“If McDonald’s folds where are we going to find a public bathroom while traveling?
We stopped at a Lowe’s once. Worked out pretty well.”
“If McDonald’s folds where are we going to find a public bathroom while traveling?”
“I suspect it will soon be a progressive, transgendered accommodating restroom. Your wife will use the restroom with a really ugly guy dressed as a chick.”
You could be talking about KFC too. lol
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