In a brand-new
McDonald’s outlet near its headquarters in Oak Brook, Illinois, customers do
not have to queue at the counter. They can go to a touch screen and build their
own burger by choosing a bun, toppings and sauces from a list of more than 20
“premium” ingredients, including grilled mushrooms, guacamole and caramelised
onions. Then they sit down, waiting an average of seven minutes until a server
brings their burgers to their table.
McDonald’s is planning to roll out its “Create Your
Taste” burgers in up to 2,000 restaurants—it is not saying where—by late 2015. It
is also trying to engage with customers on social media and is working on a
smartphone app, as well as testing mobile-payment systems such as Apple Pay,
Softcard and Google Wallet.
All this is part
of the “Experience of the Future”, a plan to revive the popularity of
McDonald’s, especially among younger consumers. “We are taking decisive action
to change fundamentally the way we approach our business,” says Heidi Barker, a
spokeswoman.
In 2014 Don
Thompson, the firm’s relatively new boss, had to fight fires around the world,
some of them beyond his control. Sales in China fell sharply after a local meat
supplier was found guilty of using expired and contaminated chicken and beef.
Some Russian outlets were temporarily closed by food inspectors, apparently in
retaliation for Western sanctions against Russia over its military intervention
in Ukraine. And a strike at some American ports left Japanese McDonald’s
outlets short of American-grown potatoes, forcing them to ration their portions
of fries.
However, the
biggest problem has been in America—by far McDonald’s largest market, where it
has 14,200 of its 35,000 mostly franchised restaurants. In November its American
sales were down 4.6% basically due to competition from Burger King, Subway and
Starbucks, and from the growing popularity of more upmarket “fast casual”
outlets.
In response,
McDonald’s has expanded its menu. Its American menu now has almost 200 items.
“McDonald’s
stands for value, consistency and convenience,” says Darren Tristano at
Technomic, a restaurant-industry consultant, and it needs to stay true to this.
Most diners want a Big Mac or a Quarter Pounder at a good price, served
quickly.
McDonald’s says
it has got the message and is experimenting in some parts of America with a
simpler menu: one type of Quarter Pounder with cheese rather than four; one
Snack Wrap rather than three; and so on. However, this seems to run contrary to
the build-your-burger strategy it is trying elsewhere, which expands the number
of choices.
Some analysts
think that McDonald’s should stop trying to replicate all its rivals’ offerings.
It should go back to basics and offer a limited range of dishes at low prices,
served freshly and quickly.
To make matters
worse, McDonald’s isn’t cool any more, especially among youngsters. It is hard to imagine the new McDonald’s
initiatives getting the reaction Shake Shack got when it opened its first
outlet in downtown Chicago in November: for the first two weeks it had long queues
of people waiting outside in the freezing cold.
