Posted on 10/21/2015 10:51:48 AM PDT by Kaslin
I saw a sad but not totally unexpected news item from John Hawkins this morning regarding one of America’s premiere dining outlets… McDonald’s. The House That Ronald Built has fallen on hard times, with some estimates indicating that a significant portion of the franchises are currently insolvent or seriously in the red. The dire warnings from franchise owners are including phrases such as, “these are the final days.” (Yahoo News)
McDonald’s franchisees believe the brand is in a “deep depression” and could be facing its “final days,” according to a new survey.
“We are in the throes of a deep depression, and nothing is changing,” one franchisee wrote in response to the survey by Nomura analyst Mark Kalinowski. “Probably 30% of operators are insolvent.”
Another wrote, “The CEO is sowing the seeds of our demise. We are a quick-serve fast-food restaurant, not a fast casual like Five Guys or Chipotle. The system may be facing its final days.”
More than a dozen franchisees expressed frustration with McDonald’s management, saying that CEO Steve Easterbrook’s turnaround plan — which includes initiatives like all-day breakfast and a shift to digital ordering kiosks — is a distraction from the core issues of McDonald’s, like food quality and customer service.
“The lack of consistent leadership from Oak Brook is frightening, we continue to jump from one failed initiative to another,” one franchisee wrote.
We’ve talked about this here before and it’s been a regular feature of financial news headlines. McDonalds has been losing money right and left and they’ve been dumping massive resources into a seemingly endless array of marketing gimmicks as they try to turn their fortunes around. None of it seems to be working, and the reason may be that they’re not addressing the core issue which some of the franchisees are bringing up: the chain strayed away from their original core mission and the strength of their brand in response to social pressures of the day.
Let’s face it… McDonald’s was never meant to be a fancy, high end eatery, nor were they a health food store. It was fast food that tasted good and people were willing to tolerate all the negatives that came with that deal if the price was right. It’s true that costs of beef and some of their toppings have been going up, leading to pressure on them to raise prices, but that’s hardly the only cause for their woes. Everyone in that market sector is dealing with the same problems. No… what really killed McDonald’s market position was selling out to liberal pressure groups.
I think the beginning of the end can be traced back to 2002 when they buckled to pressure from health nuts and changed the oil they used to make their french fries, cutting the dreaded trans-fats. They tinkered with the formula again in 2007 but it was never the same. Are any of you old enough to remember the original McDonald’s fries? Those things were like crack in a cardboard cup. I could eat two large orders by myself because They… Were… Awesome. Were they good for you? Obviously not. But that’s not why we bought them. It’s not Ronald McDonald’s responsibility to keep you healthy, it’s yours. When they changed the fries they were just awful and I didn’t order them nearly as often.
Later the restaurant felt even more pressure from the health obsessed wing on the left and began “diversifying” their menu to be less trashy. They were trying to sell apple wedges as an alternate for fries and the menu was stocked with salads. SALADS. At McDonald’s. The only lettuce we needed to see during a visit to the Golden Arches was shredded up on the Big Macs. More changes along those lines followed and their brand loyalty cratered.
The problem with adding lots of options is that more food goes to waste since they have to prepare some of it in advance. Sure, people will always say they love more options, but it’s not always economically viable. The Breakfast All Day idea sounded great to me, but if they’re losing money on it then it’s one option too many. So that was their other major issue… too many options. But to combat the problem, they decided to diversify the menu even further and start offering all manner of specialty sandwiches. Some were good and some… not so much. But yet again they were losing more money by having to stock up and prepare even more items which didn’t fly off the heating tables fast enough. And most of this was done in response to reading too many articles in the New York Times.
McDonald’s could still probably be saved, but I doubt they’re willing to risk the backlash from Michelle Obama’s army if they did it. The company could go back to their old school formula. Trim down the menu for starters. You need a hamburger, cheeseburger, the Quarter Pounder and the Big Mac. Toss in the fish fillet and maybe one chicken sandwich. Put the fatty, lard filled oil back in the fry machine. Keep those molten hot apple pies and maybe a few dessert options. Kick the rest except for some seasonal specialties like the McRib. I’m guessing people would come back and your waste costs would go down hugely. You may get nailed with a minimum wage increase, but all your competitors will face the same thing if you do.
It’s a shame to see McDonald’s floundering, but they really brought it on themselves.
Apparently that queer stuff was a franchisee optional thing, because it did not happen at any of our local stores (that I am aware of).
Carl’s / Hardee’s is a staple in Oklahoma from ages ago. They used to have a raisin biscuit and so had a troupe of traveling raisins from their TV spot. A friend’s wife was the coordinator and traveled with the group. Funny tales from that time.
https://www.youtube.com/watch?v=o49QCHaEmhg
Always went by the Hardee’s in Weatherford for a huge bag of biscuits to take to the rig for the crew VERY early in the mornings when I went out to shoot a well or something like that.
Good times. Enough for the fast food thread though.
McDonald’s is where White Folks go to order a coma.
1) A Burger King Restaurant
2) A Starbucks location
or...
3) A Panera Bread location...
Keep the old locations...you, too, Burger King
Sonic is good, but I hate those ads for them...(The 2 guys in a car, they must be gay)
Brown wood is easier to keep looking “clean” than white subway tile.
I think they’re the same thing now. On the west coast they’re CJ back east they’re Hardee’s.
I still remember when the ad was: You can get a hamburger, Coke, and fries and get change back from your $1.00.
It’s not a dollar any more, but it’s still the right formula.
McDonald’s is still better than Checker’s/ Rally’s, of course, those places are garbage....
No. If they go under it will be because they never successfully adjusted to a fastfood map that began changing rather dramatically in the mid-90s. They’ve had a long time to notice that Americans are more into quality now and less into fast and yet they’re still obsessed with giving you a bad burger that’s a poor value in 30 seconds.
Time to return to the basics!
Lard is pig fat. Apparently this has never been used in MacDonald’s fries. The fries were originally cooked used beef tallow but McDonald’s switched to vegetable oils for cooking fries in 1990, 25 years ago. The incident with the Hindu lawsuit involved the continued use of beef flavoring. McDonald’s fries still contain beef flavoring, except in India.
The food didn’t become inedible, it really hasn’t changed that much from what it was in the old days. But we’ve become smarter in the ways of food and realized their food was ALWAYS inedible. McD’s success was in the days when we knew instant coffee tasted like crap and we drank it anyway. We don’t do that anymore.
the fillet-o-fish was never cooked in tallow. It’s one of the reasons they made the change, they used to have 2 different greases, the stuff with a touch of beef for the french fries and the stuff with none for everything else.
Not the same after they scrapped Thomas English Muffins...
Hardee’s/Carl’s Jr are the samecompany...
Used to be all of fastfood was a revolving door. Employee turnover in the industry averaged 300% annual. This is another place where McD hasn’t changed with the times. The competition figured out employee retention saves money, McD still sees everybody as expendable.
Yeah, the fries buckling cut the quality of one food offering. But the big problem is their shoe-leather hamburgers and the overall steamy/soggy presentation of their burgers.
Perhaps legal/regulatory issues led to them cooking them to oblivion, but whatever the reason, it is bad burgers that did them in.
I live in Manassas and the MCD near me is mostly hispanics working and I feel fine and I am of a darker shade, I live in a mixed area btw, everyone is different really, but to each their own.
I guess that explains why the McLean Deluxe was such a smashing success?
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