McDonald’s Faces Perfect Storm

Posted on by Patty Odell

On the one hand there’s salads and sliced apples. On the other, it’s Big Macs and fries. McDonald’s keeps trying to reimagine itself to keep up with changing consumer lifestyles, food preferences and pocketbooks. It’s still in the fight with big competitors like Burger King and Wendy’s for lunch and dinner, and Starbucks and Dunkin’ Donuts for breakfast. McDonald’s has had to wage a new battle with these established brands, as well as emerging competitors like Smashburger and Chipotle, who are drawing away untold numbers of its prime customers—milllenials—by the masses. In an interesting twist, McDonald’s used to be a major stakeholder in Chipotle, even sharing its distribution network, but has since divested its interest in the chain.

McDonald'sSteve Easterbrook, McDonald’s new CEO as of March 1, is not wasting time. He has a new vision and turn around plan for McDonald’s, which the author lays out.

One of his biggest changes so far for Easterbrook, which many of us likely heard about through the national news, is the announcement about using only chickens that are largely free of antibiotics used to treat humans. A huge shift that is likely to attract a new breed of customer.

Last year, the company reported dismal performance and the just released February results showed no improvement, including a steep falloff of 4% in the U.S. for same-store sales, a far worse result than analysts expected. When announcing the results on Monday the company said, “McDonald’s current performance reflects the urgent need to evolve with today’s consumers, reset strategic priorities and restore business momentum. The goal going forward is to be a true destination of choice around the world and reassert McDonald’s as a modern, progressive burger company.”

This article from The Chicago Tribune also lays out more turnaround plans, including a new app this summer for a possible coffee loyalty program, updated restaurants and adding Create Your Taste ordering system kiosks.

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