Globally, McDonald’s is bleeding customers like a McOz bleeds beetroot juice. US McHeadquarters has just announced plans for a massive corporate restructuring, but how will that impact Macca’s down under? Here’s what you need to know as a fast food junkie or occasional McMuffin consumer.
To be clear, McDonald’s isn’t actually losing money. However, it isn’t growing — sales in its most recent quarter fell 2.3 cent globally — and when you’re a listed company, the official market view is that not growing simply isn’t good enough.
So the panic button has been hit, and McDonald’s is pursuing a major restructuring that will see it sell more company-owned stores to franchisees, as well as simplify its menu and change its global structure. The wide range of items a typical McDonald’s now sells means that you almost always have to wait for your food, and customers don’t like that.
The most important point if you eat McDonald’s down under: the local operation has never been an exact replica of the US, so not everything that happens there is necessarily going to be copied. McDonald’s is currently running TV ads locally to remind us that the McCafe concept was invented here, but there are plenty of other examples.
There’s no pink slime in the burgers. You can’t easily buy oatmeal for breakfast. The US is just starting delivery trials, but we’ve had that option in Australia for some time. (It isn’t very good, but that’s not the point.) We’ve even seen experimental stores without McDonald’s branding at all. Most importantly, McDonald’s Australia is more generous with its pay than its US parent.
That doesn’t mean there won’t be changes. McDonald’s global goal is for 90 per cent of restaurants to be owned by franchisees, rather than operated by the company directly. (McDonald’s originally expanded using only the franchise model, but in the 1970s owning company stores became more common.)
In Australia, around two-thirds of stores are owned by franchisees. To hit that 90% target, it seems inevitable some company-owned stores will be sold off. Sea change with a burger, anyone?
McDonald’s is also reorganising its corporate structure. Australia will be placed in a group labelled “International Lead Markets”, along with the UK, Canada, France and Germany. These collectively account for 40 per cent of global sales. (The US on its own accounts for another 40 per cent.)
The McLogic is that as these are similar markets in terms of structure and penetration, running them together should be cheaper and they may be able to borrow ideas off each other. “McDonald’s new structure will more closely align similar markets so they can better leverage their collective insights, energy and expertise to deliver a stronger menu, service, and overall experience for our customers.” CEO Steve Easterbrook said when announcing the plan. Doug Goare, who currently runs McDonald’s Europe, will head that division; if he’s looking to transplant ideas, we’d suggest copying McDonald’s Germany and serving beer. Alas, licensing laws make that unlikely.
What changes would you like to see Macca’s make? Tell us in the comments.