McDonald’s tried to do it all, but just posted terrible sales results

[Chieflets]

McDonald’s is having some Big Mac-sized problems as it finds its image and menu are poorly suited for consumers’ increasing preference for fresh, healthy ingredients.

Shit Mcdonalds loosing money when paying few dollars to kids and taking away there free lunch break meal they used to be entitled too

The restaurant chain said that its global profit tumbled 21 percent in the most recent quarter, and its sales at US restaurants open more than a year sank 1.7 percent. Restaurant traffic was down in all its major markets across the globe.

This latest stumble caps a tough year for the world’s largest fast-food business, whose troubles are a marker of a broader cultural shift shaking the industry: Diners are increasingly seeking food that is fresh and healthy, and the explosion of fast-casual restaurants in the US such as Chipotle, Panera Bread and Five Guys has given them alternatives that are nearly as speedy as a fast-food joint and perceived as much healthier.

But McDonald’s acknowledges that many of its problems are of its own making: As the company tried to take on these new competitors while also hanging onto its traditional business, its menu grew bloated and its pricing strategy became confusing.

McDonald’s has said that wait times were getting longer at its drive-through windows as its menu grew increasingly long and complicated, with some 100 items added over the last 10 years. Some restaurants didn’t have enough space in the kitchen to prepare such a wide array of dishes.

When the company unveiled a sweeping turnaround strategy late last year, it promised to streamline its menu to fix the bottleneck. But as the details of the plan have unfolded, analysts say it seems muddled.

The chain is eliminating eight menu items and five Extra Value Meals. But it is also promising to regionalise its offerings in the US with different sauces or flavours to appeal to local tastes, a move that seems to contradict the stated goal of simplifying the menu.

McDonald’s has also been rolling out a custom burger option it calls “Create Your Taste,” in which diners can pick and choose their toppings — something similar to what might be offered at a more upscale fast-casual chain.

“It smacks a little of trying to be all things to all people, and I think that’s a very tough brand positioning to pull off,” said Mark Kalinowski, restaurant industry analyst at Janney Capital Markets.

Kalinowski says he’s skeptical of the choice to double-down on the “Create Your Taste” concept because it doesn’t translate well to the drive-through window, where he estimates McDonald’s pulls in more than 60 percent of its US sales.

It’s not just the length of the menu that has been perplexing to McDonald’s customers — it’s the pricing structure. The company thinks of its products in three categories: entry level, core and premium. To keep its popular Dollar Menu pricing in place for entry-level items, it was forced to nudge prices up on core items, a category that includes the Big Mac and Quarter Pounder with Cheese. Executives have said the wide price gap likely confused diners and pushed more of them to opt for its cheapest offerings. In turn, that may have weighed on total sales and bruised perception of the overall quality of McDonald’s food, since perhaps more people were evaluating the brand based on its cheapest products.

The backdrop of these problems is the rocketing growth of fast-casual chains. Growth in the fast-casual category is easily outpacing growth in the restaurant industry overall, according to research firm Technomic. Fast-casual restaurants saw an average increase of 7.9 percent last quarter in sales at restaurants open more than a year, while quick-service restaurants — a category that would include McDonald’s — grew just 1.2 percent. The restaurant industry overall saw 2 percent same-store sales growth.

“The pace of change outside McDonald’s has become faster than perhaps the pace of change internally,” said Michael Andres, McDonald’s president, on a conference call with investors in December. “Consumers have redefined quality and value. And the focus more, as you all know, is more on wellness.”

McDonald’s has tried to respond to the desire for fresh food with items such as salads and wraps, but the company has said these items don’t sell particularly well. That is, perhaps, an indication that consumers want to come to McDonald’s for burgers and chicken nuggets just as they always have, but they want those dishes to be prepared more healthily.

The company said Friday that it expects comparable sales for January to continue to be negative and expects earnings results to be “pressured,” particularly in the first half of 2015.

McDonald’s is deploying a variety of tactics to restore the shine of the Golden Arches, including a new marketing campaign. However, in a recent survey conducted by Janney Capital Markets, some McDonald’s franchisees said that new advertisements “don’t seem to be generating any meaningful near-term lift in sales trends.”

Since millennial-generation diners seem particularly curious about where their food comes from, McDonald’s in October announced a new effort to answer diner questions on social media about its supply chain and food preparation techniques.

And perhaps most importantly, the restaurant chain says it is committed to trying to find ways to improve the taste and quality of its food by experimenting with different cooking procedures and evaluating the ingredients it uses.

“What they really need to focus on is innovation on the value end of the menu,” said Will Slabaugh, a restaurant industry analyst with Stephens, instead of trying to push premium dishes.

McDonald’s will have some tailwinds as its fights to lure diners back to its restaurants. With lower gas prices and an improving economy, forecasters are predicting better traffic overall to the restaurant industry. And after its Asia business took a hit last year when a key supplier was accused of using expired meat, that issue is likely to be in the rearview mirror in 2015. And while comparable sales were down for the quarter, they were up 0.4 percent in December, a sign that some of the company’s turnaround efforts might be starting to gain traction with consumers.

“I’m definitely not counting them out by any means, but it’s not an easy process to regain that customer momentum,” Slabaugh said

[Downunder35m]

Their stuff tastes like crap anyway LOL
More and more people realise that fast food is not really the best choice to loose weight and more and more low income earners don't want to waste money on fast food.
If they want more customers they should provide burgers that actually like a burger and not like cardboard with slice of cucumber LOL

[Chieflets]

I thinks it the convenience for long working parents and also many times cheaper than buying all ingredients fresh to cook up

[WhiteOx]

If they want more customers they should provide burgers that actually like a burger and not like cardboard with slice of cucumber LOL

Actually I don't mind their Grand Angus burgers.

[gordon_s1942]

I cant see so called 'Customising' their menu is the way to profit because the whole premise of a 'Fast Food' outlet is making the same thing in each store as fast as possible.
Taste is taste and I have had hamburgers in Cafes you could sole your shoes with so I dont take notice of claims that McDonalds are better or worse in their burgers than any other place.
What I do take notice of is that when I do eat at McDonalds is that it is the same menu and near price range and that I expect to get exactly the same 'Big Mac' there as I do either at home or away.
'Take Away Fast Food' places like McDonalds, Red Rooster, Hungry Jacks or KFC are not and have never been nor claimed to be Gourmet or Cordon Bleu restaurants, they are what they are and the simple answer to complaints is to go elsewhere or cook it yourself.

[enf]

I have no problem with Maccas. I don't like it and I don't eat it unless I'm on a long road trip, but others can make their own choices.

As for the profit fall, a 21% drop in an income of a squidillion dollars is still a squidillion dollars minus 21%.....a f*cking shit load of money.

[gordon_s1942]

Many Years ago I remember COLES was reported as saying their profit margin was a Half Penny in the Pound or something like that which means you have to turn over lottsa Pounds to make a Pound and for those too young to remember, there are 480 Half Pennies in the Pound.
When I am traveling which now isnt too often, I will use whichever Fast Food outlet is available simply because of that complaint of many, its all the same where ever you go and we can eat it without getting tummy grumbles.

[trash]

Well Macca's used to be one of the best business models. But they have forgotten that model themselves and that was the source of their success.

At the very core is "consistency".
"VARIATION IS THE ENEMY OF QUALITY".
When you walk into Mcdonalds there is only one reason why you are there.
You know what you're going to get. When I order a Cheeseburger it will be exactly the same no matter where in the world I buy it from them.

Do not confuse GOOD QUALITY with HIGH QUALITY. These two things are very different.
A box of matches is a good quality item. You strike a match and it works exactly as you expected it to, and then you throw it away.
A Sports Car is a high quality item. There are certain things you expect from the performance even if they are not easily defined.
A macca's cheeseburger is an example of a low quality, but good quality. Or at least it used to be.

Maccas also of course offer a service as will as their products.
That service was expected to be fast. Do you remember their 60 second challenges. You order was filled in 60 seconds or you got a voucher for a free meal etc.

So how do I remember maccas from the 70's and 80's?
They were FAST. I might have had to wait in the line for two or three minutes, but once I placed my order, I was out of there 60 seconds later.

The food has never been high quality. I don't expect my lettuce to be nicely trimmed and the beetroot carefully placed like a Japanese chef had prepared it.
I expect my cheeseburger to......
* Have a bun and those two piece of bun to be aligned within 5mm precision. Not the top bun 3cm off to one side.
* A meat pattie. That meat I do not expect to be fat free or GM free. Mince is low quality meat (not bad quality meat). It's lips and arseholes, we expect that.
* We don't expect it to be sub-standard (bad quality) meat treated to make it useable. The pink goo 'treated' meat kind of thing is bad.
* We understand that the patties are mass produced and so they need some processing and preserving to get them to the customer.
* we expect the meat to be cooked properly. Not under or over cooked.
* We expect the burger to be fresh. Not cooked half an hour ago and kept warm.
* The Cheese placed correctly. Like the bun, not half hanging off.
* The onion to be CONSISTENT. Not a little on one burger and a truck load on the next. 2 grams +/- 0.5g is the kind of thing I expect.
* And a pickle. (We'll address this subject later)

#service
The current service model is pretty crap.
It should go like this.....
I approach the counter (out of the queue if there is one).
I place my order, "I want a cheeseburger meal."
That'll be $5 sir. ^Note: round prices to whole dollars if possible. Makes change simple and quick. The time you waste handing me 15 cents change is costing you 20 cents.

Now for the critical part......
We'll use their current model:
They hand me the ticket number.
The second minion looks at his computer screen, put the cup under the drink machine and presses go. (All cups large size) why bother with different size cups when there is no cost difference between them?
The second minion then grabs the burger from the old sliding rack and then grabs the bag of fries which were cooked not longer than 5 minutes ago. Old chips are dumped when the next batch comes up.
Finally the minion grabs my drink, slams the lid on it and I'm outta there.

The same model should work for the drive through. If you have to go to a waiting bay, then either they're doing something wrong or you're being an idiot with a huge order.

-----

SIMPLE
FAST
and above all CONSISTENT.

They used to do these well, now they don't do any of them.

All the time trying to raise the quality of the food (and service) should be an aim.
One thing you notice about Maccas in some other parts of the world is that it actually tastes good.

Russia is one of my favourite examples.
Their burgers have always been fresh and juicy. They're still nothing like a country milk bar Australian burger, but they're good enough to say, "That was a satisfying burger."
Their chips are never soggy or cold. In 30 years of USSR/Russia I've not even seen one bad chip from them.
The food is GOOD quality and it's fast and fresh. (Though slightly expensive by Russian standards)

The service is also fantastic. I can walk in and deliberately not speak any Russian and within two minutes, even if the place is packed, I can place my order, pay for it and walk or or be looking for a place to sit down.

And in other parts of the world it's not much different. Even USA where you might expect the quality to be similar to here, it's noticeably better there.

The problem I think lies with McDonalds Australia.
Their management and training.
Their wholesale and supply.
Their menu
Their method of serivce
Their staff training.

This doesn't even touch on Mcdonald's branding and cultural insensitivity in Australia.
French Fries??? NO FVCK OFF !!! Australian Translation: McChips !!! They're Pommes Frites in France and Kotoffil Fri (potato fries) in Russia.
Quarter Pounder??? Cheesburger Royal in France, Royal Cheeseburger in Russia etc. quote from Pulp Fiction, "Because of the Metric system." Pay for your burger cost 2d/-.
Cookies?? Next time you go, ask for a packet of McBiscuits!!

And it's just Un-Australian to put pickles in a burger!

[jwoegerbauer]

Beef and pork aren’t too popular on Indian menus anyway: Hindus hold cows sacred and choose not to eat beef, while Muslims view pigs as unclean. The iconic Big Mac isn’t even sold in India: in its place the chicken-filled Maharaja Mac. Indeed, about half the items currently on the menu at McDonald’s 271 Indian restaurants are already vegetarian.

I believe McDonald's going vegetarian probably is the right way. Sounds really very wonderful for many vegetarians worldwide wherever this esteemed organization has established its popular restaurant. And I think it would make good business sense! For example, the number of vegans has doubled in the US in less than 3 years.

[aa23]

For example, the number of vegans has doubled in the US in less than 3 years.

So now there's 10 of them?
Vegans, Vegetarians, whatever they're called, won't flock to Macca's. They're already used to eating their own style of food, and probably wouldn't trust Macca's anyway.
Sell burgers and Fries, like you used to years ago, which is haw you made yourself so successful. Stick to what worked, but keep an eye on some changes that have to happen.

I don't usually buy Macca's, simply because of the cost. But it is handy if I have to work back late, and feeling snackish on the way home.

[cmangle]

you oz guys are forgetting that their chicken McNuggets weren't made of chicken either!

[ol' boy]

McDonalds are in the business of real estate, not Burger sales.
So how is their Real Estate portfolio looking?

Pretty good i'd say.

[ol' boy]

you oz guys are forgetting that their chicken McNuggets weren't made of chicken either!

Separation ended in 2003

[Godzilla]

At the very core is "consistency".
"VARIATION IS THE ENEMY OF QUALITY".
When you walk into Mcdonalds there is only one reason why you are there.
You know what you're going to get. When I order a Cheeseburger it will be exactly the same no matter where in the world I buy it from them.

I can assure you a fillet of fish here is VERY different to in Japan, here they are the only burgers that id eat, over in Japan its a real slice of fish waiting for you, no tarte sauce either. (boy do i lose weight when over there)

The menu is adjusted to their customs and taste.

[LeroyPatrol]

I can assure you a fillet of fish here is VERY different to in Japan, here they are the only burgers that id eat, over in Japan its a real slice of fish waiting for you, no tarte sauce either. (boy do i lose weight when over there)

The menu is adjusted to their customs and taste.

It's really a 'fillet of whale' lol

Leroy

[ol' boy]

[cmangle]

Boneless lean beef trimmings (BLBT) is a safe, wholesome and nutritious form of beef that is made by separating lean beef from fat.

Some recent media reports created a troubling and inaccurate picture, particularly in their use of the colloquial term "PINK SLIME".

And then there was the texture. Unpleasantly chewy bits of what I can only describe as gristle, though they were not visible, seemed to stud the meat of the pink slime burger.

In February 2012, fast food chains McDonald's, Taco Bell, and Burger King announced they would stop using BLBT in their food products. In March 2012, the grocery chains Kroger, Safeway, Supervalu, Bi-Lo, and Winn-Dixie announced they would stop buying BLBT products. There was NO legal requirement for them to stop using BLBT!

Did they? . . . . and how about outside of the US? Do BigMacs in OZ have "Unpleasantly chewy bits of what I can only describe as gristle" ?

[WhiteOx]

you oz guys are forgetting that their chicken McNuggets weren't made of chicken either!

Hahaha! I know someone who works in a chicken processing plant, when he first started there he was asked to take 15kg of chicken skins to another area.
When he got to the other part of the factory he asked them who would want 15kg of chicken skins - They asked him if he liked McDonalds McNuggets.

[gordon_s1942]

Over at a local Fish and Chip shop they do or did sell a 'Hamburger with the lot'
This was a Meat Pattie, Lettuce,Tomato, Onion,Beetroot,Bacon,Egg,Pineapple, Cheese, sauce of choice, Salt and Pepper (to taste) placed in a lightly toasted and buttered Bun.
The last one I bought we cut in half and that was lunch.
The Mince used for the Pattie came from the Butcher shop next door but he left town rather hurriedly so I dont know where they source their meat from now.
And if you have ever watched them grinding the mince in a Butchers shop................need I say more?

[ol' boy]

Lets face it, No One goes to McDonalds for a healthy meal, we all go to Maccas for one reason, we feel like some junk food.... Fat, Sugar and Salt, its an aged old recipe that works!
Anyone who thinks there Fillet of Fish or any other so called healthy choice is good for you is kidding themselves.

What i have noticed at Ring Road type Service Station McDonalds outlets, is there is also other Food outlets there now, one is Oliver's, its a Health Food outlet, around a 2 years ago, i never saw anyone at their counters, but there would be 6 people deep at the Maccas.
Today, the other options, Olivers in this case, has a constant stream of people at the counter. (and its bloody good food too)

So maybe people are prepared to make better choices
Besides, there is NOTHING cheap about eating at Maccas anymore!