What more do ya' want?
Posted on 09/17/2002 12:52:15 PM PDT by GeneD
NEW YORK - Making arches more golden is easy; making your workers more professional is hard.
That is the problem facing McDonald's, which has 30,000 restaurants and more than 360,000 employees around the world. Today, the Oak Brook, Ill.-based fast-food giant warned once again that it would see lower-than-expected profit. The world's biggest restaurant chain said it expects earnings of 38 cents to 39 cents per share in the third quarter, well below Wall Street's prediction of 42 cents per share, according to market research firm Thomson First Call.
The news sent McDonald's shares down more than 10% in midday trading.
In a press release today, McDonald's Chief Executive Jack Greenberg called the U.S. marketplace "extremely competitive." Indeed, the chain faces challenges from the higher-priced hamburgers of Wendy's and the cheaper fare of Burger King, not to mention the entrance of higher-quality brands offering "fast casual."
Greenberg outlined several initiatives to counter the challenging environment, all of them focused on the faltering U.S. market, which is responsible for 56% of the firm's total profit. He said McDonald's would pump between $300 million and $400 million into existing U.S. franchises next year, presumably to renovate certain restaurants and introduce new equipment.
The plan will be paid for in part by reducing new restaurant openings. McDonald's, which has reached saturation levels in several important markets, had planned to open up 1,400 new restaurants, according to a Morgan Stanley report. The report said that cutting new openings to 1,000 would do little to change total sales. What apparently gave investors more concern was that the company also said it would cut share buybacks to about $500 million from the $1 billion it spent last year. With stagnating sales, share repurchases have been one of the only things increasing the firm's earnings-per-share ratio in the past few years.
Greenberg said McDonald's will benefit from increased advertising of its $1 value menu. The move is a positive one, according to Morgan Stanley analyst Michael Sherrick. After all, the company needs to compete with Wendy's super value menu and Burger King's recently introduced 99-cent menu. In addition, cheaper items draw customers and result in order add-ons.
Though the franchise is right to upgrade skeletally by sprucing up existing restaurants and reducing prices, it is having a much harder time improving the blood and guts of the operation: its massive and far-flung staff. As Salomon Smith Barney analyst Mark Kalinowski said in a report last week, "We would love to see more details about how McDonald's will combat what we view as its key challenges in the U.S.: rude service, slow service, unprofessional employees and inaccurate service. In our opinion, what we have seen does not go far enough in addressing these issues, which together account for the vast majority of customer complaints in the U.S."
Until McDonald's comes up with a plan for upgrading service, warnings may be a quarterly event.
I'm sure she was quaking. I used to work retail, and you are the type of customer that always made us laugh. Nothing personal, I'm just stating the truth.
I don't know. Is there a work ethic with kids these days?
Approx. $6/hr. You try it, and let's see the attitude. You get what you pay for.
What more do ya' want?
No thanks.
Leaving aside the issue that I always felt silly ordering it by that goofy name, when I was a kid (a few decades ago) the McDonald's fish sandwich was delicious. It was juicy, tasty, and wonderful. It tasted like, surprise surprise, fish.
Now, it's dry (it'd stick in your throat if it weren't lubricated by tartar sauce) and tastes like cardboard. The "meat" is also about half as thick as it used to be.
Economics is not dictated by what the employee is "supposed" to use their wages for. Economics is dictated by a balance between wages and labor. If their is imbalance in this system, there will be an imbalance in the quqlity of service. All talk of "work ethics" aside, there must be fair wage for fair labor. Crappy wage=crappy labor, all bellyaching aside. There is no such thing as a work ethic simply for work ethics' sake.
If you want better service, be prepared to pay $6 for your Big Mac. If you are not willing to pay that, than you can forget about service with a smile, and tucked in shirts.
Who cares about that anyway? I'll take the cheap food and not worry about the quality of employees that their pay scale attracts.
but gained it from every other parent. Geez, we used to plan our weekend outings around locating a McDs. Get out of the house early, get the kids pooped out somewhere from hiking, playing, etc, hit McDs and let them nap on the way home.
I agree with one of the other posters, however - even our kids are starting to get sick of Micky Ds.
The point of my post was that the McDonald marketers decided whose business they wanted, and whose they did not.
I can't feel sorry for someone who disdained my business during the flush times and now wants my sympathy because their target market is not as lucrative nor as loyal as they thought it would be.
I agree there. I see nothing wrong with McDonalds. The service is what it is because the pay is what it is. It also depends somewhat on the "community" a particular McD's is located in.
The food is decent and cheap. If you don't like an employee's attitude, what are you going to do? Try to get them fired? Oh my! There goes their new Mercades. LOL!
I can agree with most of the points you have made except for the one above.
If a person accepts a job knowing what it pays, then they should perform that job.
Having to work a low wage job is no excuse for a bad attitude.
My complaint also. Get indigestion with that McAfrica jive. It's absolutely obnoxious.
Morally and ethically, you are correct. Economicaly, that is not the way the world works. Either be willing to pay $6 for you Big Mac, or deal with it. You can't change the nature of the free market.
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