McDonald's in crisis
Source: Rupert Neate (@RupertNeate) in New York: For the Observer
Financial analysts and restaurant consultants reckon that McDonald’s main problem is that it has largely ignored the changing tastes and ideals of its core American customers – and thus backed itself into the stickiest of corners. Easterbrook will find it hard, they argue, to catch up with the new wave of hipper, rival fast-food chains such as Shake Shack, Panera Bread and Chipotle, while at the same time staying cheap and fast enough to satisfy its remaining loyal customers.
Financial analysts and restaurant consultants reckon that McDonald’s main problem is that it has largely ignored the changing tastes and ideals of its core American customers – and thus backed itself into the stickiest of corners. Easterbrook will find it hard, they argue, to catch up with the new wave of hipper, rival fast-food chains such as Shake Shack, Panera Bread and Chipotle, while at the same time staying cheap and fast enough to satisfy its remaining loyal customers.
ohnson said McDonald’s’ biggest challenge is winning over the most fought-over demographic: millennials (people who became teenagers around the year 2000). “These are the people having kids right now. They have a whole different value equation, it’s not just about price and quality.
“It’s about morality and ethics and wanting a healthy lifestyle,” she said.
“They’re not dieting, they’re making lifestyle changes and are saying ‘I don’t want fast food on my agenda.’ But when they do decide to have an indulgence day or a cheat day they are upgrading to a better-quality experience.”
McDonald’s has tested a new initiative called Create Your Taste that would allow customers to create individualised burgers costing up to $8 with fries and a drink – compared to $5 for a standard value meal. But Create Your Taste, which has so far been rolled out to 2,000 stores, is expected to get the chop on Monday.
A pared-back version called TasteCrafted, that will take less time to make and cost McDonald’s thousands of franchisees less than the roughly $100,000 they would have had to spend to install special Create Your Taste work stations, was announced on Wednesday.
Easterbrook was given a grilling over the cost of Create Your Taste at his first public appearance as McDonald’s CEO at a closed doors “Turnaround Summit” for US franchisees (about 80% of McDonald’s restaurants worldwide are franchised) at the Sands casino in Las Vegas. That meeting came just three days after he took over as chief executive from Don Thompson on 1 March.
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