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.
I haven’t gotten breakfast there lately, but that is a good feature. Sonic has that, too, where you can order a breakfast item at any time.
Mcmuffins are good.
BK supports queers. Re: The rainbow burger crap.
Carl’s Jr. Good food and unapologetically politically incorrect. They are racy to the point of NSFW these days.
https://www.youtube.com/watch?v=FRDSQAigCsE
That said. I believe in integration - that the best person for the job should be hired... and sometimes in a tie that tie should go to a young black person. They need a chance. That said, when I go into a McDonalds in a basically white neighborhood and EVERY employee is black I am NOT comfortable.
I'm sure if a black person whet to their local McDonalds (in the black community) and every employee was white they would not be comfortable either.
The food's ‘liberal elite spinster crap’ the atmosphere is ‘white liberal elite scold’ the prices are becoming delusional.
They deserve to go out of business.
And larger
The food quality , IMHO, ain’t what it used to be. Test: I used to be able to eat their stuff. Now it induces instantaneous barfing. (Burger King and five guys and in/ out do not).
Lard! Tacos, enchiladas and refried beans all need lard to taste right. It is the secret of French fries of course. Animal fat, it’s why we love bacon so much.
I agree. The fish burger is still edible. I’d pay extra for a slice of real cheese instead of a third-of-a-slice 0f whatever is in there. But yes, save the fish burger!
All because a Hindu sued them for not having stated that there was beef fat in the shortening and then rather than lose the huge cow worshipper market they buckled under to the minority. Some will tell you that McD's changed the shortening to buckle under to the trans fat fascists, but that's just an excuse.
Jon Stewart on Happy Meal Ban
http://www.cc.com/video-clips/92zhpo/the-daily-show-with-jon-stewart-san-francisco-s-happy-meal-ban
You are correct.
I can understand their wanting to signal Black customers that they are welcome, but in the process they appear to have alienated everybody else.
The old fries were great, but there was nothing like the atomic-hot, deep-fried apple pies, and there has been nothing like them since.
Correct.
They don’t even salt them properly anymore.
This is a ridiculous comment IMHO. McDonald's got rid of trans-fats because customers started caring more about stuff like that. They'd be doing even worse now if they hadn't changed. McDonald's has to compete in a world where people have more choices and are smarter about their health than they used to be.
Most obvious business case failure!
BRING BACK THE GREAT FRIES!!
I thought the toy ban in the HM was universal. I guess I’m wrong.
Oh, grow up! They were pressured to change the lard by the health Nazi community in the same way the tobacco industry was killed by the same freaks.
If the food tastes good and not like cardboard, people will flock back.
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