McDonald's may be the victim of its own success
When low prices are your hook, trying to stress quality can be a stretch. So far, consumers aren't buying that pitch.
That's because efforts now to market the quality of its food as well its low price aren't going over so well, judging by the chain's recent string of mediocre results. Now, it needs some fresh ideas.
The House that Ronald built today reported second-quarter results that were, in short, a disappointment as was the company's forecast of flat sales for July and tough going for the year.
Under CEO Don Thompson, McDonald's has revamped its menu, cutting poor sellers such as the Angus burgers while adding new offerings such as McWrap chicken sandwiches and new variants of its Quarter Pounder.
But customers aren't excited by these moves. McDonald's comparable U.S. store sales -- sales at stores open for at least a year -- rose a scant 1%, while operating income was relatively flat. Shares of McDonald's traded down more than 2.5% in Monday morning trading.
No wonder, given Thompson's downbeat forecast for the chain, saying "the market remains challenging and economic uncertainty is pressuring consumer spending."
Although that's true, many McDonald's rivals such as Chipolte (CMG), which reported much better-than-expected results last week, are faring better. Wendy's (WEN) recently introduced Bacon Pretzel Cheeseburger got a rave review from Brand Eating, which called it the "front-runner for best new fast food product of 2013 for sure." It's been a while since anyone has been that excited about any McDonald's offering.
The other issue is service. McDonald's customer service has been virtually nonexistent for years. As a regular customer of McDonald's, I've noticed that the workers at the locations I frequent are acting friendlier and are taking extra steps to make sure that they get my order correct.
These changes are welcome, but McDonald's has a long way to go before its customer service reaches Chick-fil-A levels.
McDonald's isn't in danger of going out of business anytime soon. It just seems like the chain is running out of ideas.
Jonathan Berr owns a small position in McDonald's. Follow him on Twitter @jdberr.
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Look Mcdonalds is not the problem here,its people making bad choices thats the real issue. Treat Mcdonalds for what it is. They serve fast,cheap burgers and fries. If you dont like their food then dont eat there. If you eat there four times a week then complain that Mcdonalds is the reason for the obesity problem in america then you are a bit delusional. Mcdonalds serves a purpose just like all the rest, Wendys, Taco Bell, Burger KIng,and the list goes on and on, but for some reason we crucify Mcdonalds while secretly stuffing are faces with their delicous fries. I eat there maybe once or twice a month, I go to the gym weight train and do cardio four to five times a week, Im in great shape and I dont blame Mcdonalds for all thats wrong in this country. Mcdonalds isnt holding a gun to anybodys head forcing them to eat at their stores, its all about choice,good or bad its all up to you.
bring back the mc dlt, it was the best hamburger you ever made ronnie
McDonald's is attempting to reinvent itself with "healthy" alternatives. McDonald's needs to go back to what it does best. A few more commercial spots of the fries being taken out of a grease vat dripping oil would cure its current malaise.
McDonald's needs to leave the tofu, salad and beansprout market to others. Get back to the sizzling burgers, eggs, cheese bacon, sauce, grease dripping fries, sugary treats and carbonated delights.
How about a new burger? An avacado, cheddar, bacon double burger.
How about a new french fry size? The collosal.
great, they took the one item off the menu that I would call edible, the sirloin burgers. I haven't eaten at this dump in over a year, and now have absolutely no reason to go back. I never thought I'd say it, but Wendy's burgers are the very best of all fast food burgers.
I only go there if I am desperate. And I never use the drive through, I usually can't understand them,
between the Foreign accents and the crappy speakers., they get many orders wrong..
I find it easier to order take out orders inside the building.
I prefer Wendy's, I can get a burger, salad and a drink for 4 bucks.
I do miss Roy Rogers Restaurants, they disappeared many years ago around here.l
I went to the local McDonalds yesterday and ordered a 10 piece chicken mcnuggets...it was $4.90.
I asked when the price went up and she didn't know. I asked how much a 20 piece was and she said $4.99......9cents more for 10 more pieces. Does this sound crazy to you?
Made 6 visits to McDonalds last week, and was made to wait for over 10 min...4 times....because
the item I ordered had to be prepared. Usually you are told this by the time you pay...giving you the option to change your order if you are in a hurry. I didn't find out until they had given me part of my order at the take out window....and that got cold, waiting on the balance of the order.
What's the deal?
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Equities began the trading day on an upbeat note following comments from the Bank of England and the European Central Bank, both of which reaffirmed their commitment to ... More
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Consumers are very status conscious in Asia, Africa and other emerging-market areas. This is especially true in China.
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