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.
What’s sad about all of this is the health nuts never ate there in the first place. It was nanny liberal.
it appeared to me that once corporate focused on “inclusiveness” they dropped the ball where ANYONE could go there & get a bite to eat-it used to be a place where there was no ethnic territory-now........it’s quite different because they want to cater to the lowest common denominator in the choice of their interior design and makes others feel unwelcome-it’s just not neutral anymore & they have watered down their brand trying to cater to every tom dick & harry ethnic group in america- i’m not talking about overseas that’s a completely diff ballgame.
“The burgers suck, the fries are bad, the the chicken tastes like rubber.”
The McNuggets have an antiseptic aftertaste. It’s the same everywhere. I think it is the oil.
McDonalds’ corporate has all but explicitly stated that they now chase the black purchasing dollar at the expense of the white purchasing dollar.
By omitting me I now omit them, and hope they go extinct.
Yep
Black people who go to white neighborhoods may get looked upon with suspicion.
White people who go to black neighborhoods may get raped and murdered.
Big difference!
Black people have been known to spit in the food of white people, whom they oftentimes resent. Thus I will not go to any place that has all black staff unless I sense they are overtly Baptist.
The Taco Bell on Main Street here has black employees that mess with white people’s food. They think it is a big laugh. I hope they go to prison.
They go after the consumers they think they can get. McDonald’s is a downmarket operation, so they aren’t going after the carriage trade. Appealing to the affluent would mean changing their whole way of doing business. Lately African-Americans and Latinos look like growth markets to them. That fits the logic of their operation. No need to feel personally slighted by any of that.
Understood that they’re under the same management... it doesn’t necessarily follow that they have the same menus.
You’re completely right! It was beef fat. And they were fabulous as Jackie Chiles might say.
No. If you face a tie, use your binary computer to make the decision:
"Heads the black kid gets it, tails the other guy gets it."
Start serving truly junk food and people will return, when we choose to eat fast food it is for cheap unhealthy food. Bring back the deep fried cherry pies.
I’ll repost what I have said before. This article could have been written by me.
McDonald’s needs to do three things to reverse the trend.
1. Eatable food - Sad that they can’t figure this one out.
2. Service - It sucks and gets worse every year
3. Kill off half the bloated menu and go back to selling what you are. You are a burger joint-not a health food store
yup, seems to me corporate incentivized racism and their own demise all in the name of diversity! LOL- mcdonalds is not the neutral territory it used to be
Deep fried cherry pies? I never heard of those and I live in the south
Report just out on Yahoo that foot traffic has increased by 9% since all-day breakfast started.
You should see the one in Selma Alabama.
In late 2007 I had to stop there on the way to south LA where my mom was dying. They had three times the amount of ‘workers’ behind the counter of most every other McD’s. And nearly every single one was wearing a “Jug Ears for Prez” button. The food I was served gave me some of the worst (temporary) stomach problems I can remember.
I haven’t eaten at a McD’s since.
Lard, Tallow, it’s all animal fat to me.
And I like’s me some animal fat, preferably a little on the crispy side.
Helps to keep me warm in the winter.
I have no problem with diversity - but an all black staff in a white neighborhood is NOT diverse.
Actually, there were two secrets to McDonald’s French Fries.
First, as mentioned was the type of cooking oil used.
Second was a process called ‘blanching’. The fries were dipped into the hot oil for a short time, then hung on racks to drain.
When needed, they were then dropped back in the oil to cook.
This made them nice and golden brown on the outside and soft (but still cooked) on the inside.
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