Is McDonald's Doomed To Die?

Remember the days when the humble “Maccas” was place for a quick and dirty meal that you know you’d regret later? Now the fast food chain is barely recognisable after undergoing some massive changes in recent years to make itself "a little bit fancy". But is this strategy working out for McDonald’s?

Competition in the fast food industry has been fierce as newer franchises enter the marketplace to displace the dominance of giants like KFC and McDonald’s. Consumers now have more choice than ever when it comes to eating out and fast food joints have upped their game in response to changing demands.

For McDonald’s, it has been trying to forge a new reputation as a classy family restaurant while retaining the speed and factory line structure of a fast food chain. The group has lost a lot of its appeal with the younger generations and are desperately trying to change its fortunes. Initiatives that have been introduced as part of the new direction include revamping the look of stores, implementing an all-day breakfast menu and bringing in a “Create Your Taste” menu which allows you to order customised gourmet burgers.

But is this new strategy working for Maccas? According to a survey of 29 franchises for about 220 McDonald’s restaurants in the US, it’s failing miserably. While the survey is US-centric, given that Australian McDonald’s follow a very similar roadmap, this information is still relevant to us.

The franchises are critical of the changes as it complicates kitchen operations and adds complexity and customer confusion to restaurant menus.

"The system is very lost at the moment,” one franchisee said. “Our menu boards are still bloated, and we are still trying to be too many things to too many people. …Things are broken from the franchisee perspective.”

According to another franchisee: “They are throwing everything they can against the wall to see what will stick.”

In the US, McDonald’s has continued to struggle financially for the past few quarters and desperately needs a turnaround and it’s still too early to tell if the new initiatives are paying off. In Australia, the chain has reported a decent profit in 2014 but seeing as we're following all the same initiatives, it wouldn't be surprising to experience flow on effects from the McDonald's US.

Given Lifehacker Australia readers are passionate fast food fans, we want to know your thoughts on McDonald’s new direction. At this rate, are they doomed to fail? Let us know in the comments.

[Via Business Insider Australia]


Comments

    All McDonalds has to do is claim their menu is now "organic" and "gluten free".

      As a legitimate Celiac sufferer, I'd be interested in a Gluten Free menu at Maccas

    Macca's used to be the go to place because it was cheap. I don't frequent the place but I went recently and got a chicken wrap, a medium (small) fries (err chips) and a bottle of water. Cost me $11 - now I have another reason why I won't be going back when you can get better and cheaper fare elsewhere.
    The menu was deliberately confusing too. Macca's was onto a good thing - simple and cheap, something which is definitely is not any longer!!!

      I feel the same way. Paying over $10 for a meal at McDonald's feels wrong.

      Yeah but isn't everything else more expensive as well (KFC, Hungry Jack's, etc.)? It's not like grilld is cheaper or crust is cheaper than dominos/pizza hut, so I get what you're saying but comparing it to everything else out there doesn't stack up. Comparing it to memories from the 90s is probably unfair.

        Compare a $12 meal at hungry jacks vs 12 bucks at maccas, you get a lot more food for your money at hungry jacks so that hurts maccas image and realise how little you get for your coin.

          Well you just have to look at the needs of the customers. With any fast food chain, what customers want the most is their food "fast", so they dont have to make it. I think the chains are focusing more on that and realising they can put the price up because people will still pay a bit extra to get their food "fast".

          There is also other factors such as age segmentation. Maccas intentionally focuses on younger age groups in their main line of products because that segment of customers are easily captured and have a surprising amount of influence in their parents purchasing decisions. This is yet another way they can raise the price and not make a loss.

          There are tons of other methods that are deployed to simply let Macca's/any chain get away with raising the price.

          The market is simply not about providing "cheap" meals any more, its all about convenience.

          As some people have noted, it would be wiser on the consumer end to spend the same amount of money on something proper and undoubtedly a lot healthier,

          On the point of getting stuff at HJ's for cheaper, although that is true, I find there is a substantial difference in the quality of the products between MC and HJ. They both provide shit grade food, but HJ is the worse of the two IMO.

          Baseline of the story is, STOP EATING GARBAGE, you can save yourself money just by eating healthier or choosing better alternatives.

            In either case it is the choices you make - you can buy a hamburger or chicken burger at HJs and pack on the salad (for free) and get a really healthy sandwich for next to nothing - if you so wish. You can also choose to remove the fatty mayo and have mustard, sauce or nothing. The 'flame' grilling also helps remove fat from the patties over a flat griddle, and tastes better.
            My fave is a hamburger with double extra lettuce,triple tomato and onion- which of course comes with mustard and ketchup rather than the mayo and ketchup of a whopper jr. That said it is a convenience meal, not an everyday faire. THAT is the key to healthy eating, variety and everything in moderation.

      Just a note, Macca's are correct in calling them fries. Chips are the larger, thicker variety like you find at KFC.

        In Australia they are all considered chips

          I have never in my life heard the thin variety of fried potatoes called "chips". They've always been fries.

            Agreed.

              According to this web site, chips vs fries is UK vs US. Americans also have thick fries.

              http://speakspeak.com/vocabulary-articles/cookies-vs-biscuits-top-5-differences-in-food-vocabulary-between-american-and-british-english

              See the comments at the bottom of this link. Also, think of McCain fries ... Not thin.

      Burger, Fries, Water & free toy for $5 (happy meal). Can change chips for Apple and water for fruit juice.
      Or a $2 chicken and mayo burger.
      I rarely visit the arches but had to about a week ago. Staff there offered me the suggestions.
      I guess expensive is relative.

      I agree, McDonalds has always had a shitty menu with low nutrition food and I have not eaten there in more than 30 years and never will.
      More and more American companies serve up shit to the people and expect us to buy it whether it be low nutrition food or poor shitty ass products.
      I won't stand for it any more.
      I buy high quality Japanese Toyota's and other high quality products.
      Fuck the American greedy ass corporations !!!!!!!!!!!!!!!
      And I am a US Veteran.

        I switched from Maccas to HJ back when Macburgers came in polystyrene containers (bad for environment).
        Maccas made a big deal of how they got rid of their nasty containers.
        So I went back, ordered breakfast. Pancakes arrived - on a polystyrene plate.

        I won't say I NEVER eat there, but they are rock bottom on the list.

    I really love the Create Your Taste menu, the self-service options and the table service. The place I go (Kew) has some very friendly and helpful staff which really helps. It's still a noisy, chaotic place, but I keep going back :) I'd be sorry to see the CYT menu go.

      I find the Create Your Taste menu to costly. Yeah the choices are nice but the cost kills it for me plus the choices of buns isn't what I wanted, a normal bun wasn't on the list :-( I wasn't really impressed with the whole CYT to be honest

        I quite like the burgers on CYT though cant really get past how oily they are. Not sure why, but everytime ive had one the burger is just seeping with oil.

    All they have to do is produce menu with much reduced Sugar and Salt content and the option of wholemeal buns. Add healthy salads as a side and market the shit out of their "very healthy" initiatives.

      Dont know why, but this also reminds me of Grill'd. When I went there last, they advertised bread with half of the usual carbs. Me falling for it like a sucker ordered it and it was literally a normal bread bun with the top half cut off. I suppose they were not lying, but that is a cheap tactic.

      Except that those options frequently cost more, which they need to pass on to customers, which means they're not the cheap meal place anymore, which reduces patronage. That's kind of the problem they're having right now. I'd wager that MOST people don't go to maccas because it's healthy, they go there because it's fast, cheap, and predictable/familiar.

        It may increase the price, but I doubt that it would be significant. Costs would be reduced with bulk purchasing of goods and they don't need to make "mega" profits, they just need to make a "profit". Take a bit of time to bring back their regulars and they will still make enough to satisfy the share holders. Never understood how we became a planet of share holders who can't accept just making a profit, not the greed fuelled shit hole it is today!

          You can't really claim 'reduced costs due to bulk purchases' because the unhealthier version is already having its costs reduced just as much thanks to bulk purchases.

          And yes, they do need to make mega profits. That's their entire reason to exist. They're not there to perform a public service, they're there to make more profit this year than they did last year. It's why stable profits or reduced profits are considered a failure, resulting in investors pulling out, tanking the company.

          I'm not saying it's a good thing, I'm just saying that going with universally healthier alternatives (which they actually already did with their frying oil) isn't always going to help if it means the food ends up being more expensive.

            I understand how the profit/share holder system works, I just thoroughly disagree with the principal, which was my point. As for the costs, it wouldn't cost that much to have wholemeal bread as an option, my wife works in the office of a major bakery, and believe me when I say that bread cost bugger all to make. Reducing the Sugar and Salt content is ridiculously easy to do too and salad already goes in the burgers, so ordering a bit extra and offering it as an extra would also be cheap to do. Cost would easily be commensurate with profits. That's my two cents, I don't want to get in a slanging match over bloody fast food, so I'll leave it at that.

    My small town has the basics when it comes to the fast food restaurants. KFC, Red Rooster, Dominoes, Subway etc. That's about as extensive as it gets. For some reason though we have FIVE McDonalds restaurants servicing such a small town

    The Menu is now overly confusing; the create your taste is a stupid gimmick which won't last another few months.

    They need to do a major cull of all these fancy ideas; stick to the basics, make the price attractive, major cull on the menu, less is more

      For some reason though we have FIVE McDonalds restaurants servicing such a small town

      The McDonald's' are there for the passing through traffic.

    I LOVE the CYT menu. It's fantastic. But I almost never use it. I run through maccas drive through because I can't be bothered doing anything else. I don't go in to the store even when I can be bothered because what I want to eat costs $16+. If I'm going to spend that much on fast food I'm going to KFC where the food is better.

    I have to say though, since the implementation of the CYT menu, the maccas cooks have managed to look at the tickets more often when creating burgers. My wife's ridiculous double cheese burger with meat and cheese only hasn't been wrong since they bought in CYT.

    I think Maccas lost their way with prices.
    Hungry Jacks, and KFC often run specials (example of Two-sdays at HJ, their $6 meal, and KFC $5 box)

    If I'm going to pay more than $10, I'd rather get some Thai, or Chinese

    Rodney Rude on Maccas: a classic.

    https://m.youtube.com/watch?v=U705EAx70Cw

    NSFW

    Went to McDonalds for lunch yesterday, no other customers and still took >1/2 a minute for someone to serve me because they prioritise drive-through and they're too understaffed. Plus they still have all the displays for an expired promotion and using cups etc. from the football world cup promotion still, all signs of penny-pinching. Doesn't bode well.

      Lol, heaven forbid you should wait half a minute for service.

    I went because it was cheap. But now when u can find a massive fried rice or bento box for around the same price, it just feels like a waste of money.

    Last edited 19/10/15 11:07 am

    Suburban Maccas are still very much a family thing. Our local is always packed out on a Saturday morning after school sports. Kids get a second breakfast and lunch while parents get a decent coffee.
    I don't think Australia is necessarily a follower either. McCafe started in Australia, along with the shift to healthier options well before US.

      I never understood the whole "Macca's after Saturday sports" thing. You've just spent the morning exercising, why would you undo it by eating junk food?

        I think it's more of, after sports you're tired so as an adult that does sports, you don't want to cook, as an adult who takes children to sports you don't want to cook and you also crave salt and lots of food quickly. It's also a bit of a social thing because you can talk about what just happened in the sports and it's easy to accommodate lots of people and get their food to them quickly as opposed to a team going to a regular cafe or restaurant. The problem also is that a lot of sports are scheduled around meal times and you don't have control over what time your game is so yeah, you're usually really hungry after because you didn't want to eat before and feel weighed down.

    I haven't had maccas in a fair while, but even when I did have it last, it wasn't cheap for a drink, burger & chips. I was thinking I can go to KFC and get one of their wraps with chips & a drink for less and I find that much more filling than maccas or even go to Subway spend less again & get a sub that's extremely filling & in my opinion satisfying. I never felt good after maccas always leaves me feeling gross & upset in the gut.

    Hell it gets to the point where Grill'd becomes a more viable option. I guess i'm at that point in life where I would rather quality in the food i'm eating. I wish a lot of friends would get on the same level, then again they appear to be raised on junk food and had maccas like every day which is kinda scary.

    They are trailing it at the moment! They are working with celiac Aus to build a section of items that get approval!

      Good luck to them, but I would be very, very skeptical about whether they could keep the preparation environment gluten-free enough to satisfy a coeliac's gut. The threshold amount is something like six micrograms. In an environment like Macca's with so many bread buns around, keeping gluten out of the process would be pretty difficult.

      My brother avoids pretty much all takeout/delivered food because you can't count on companies that offer gluten-free as a marketing gimmick rather than as a real commitment to get it right. Last time we ordered "gluten-free" pizza he regretted it the next day.

      Fortunately I seem to have missed that particular genetic bullet.

    The need to bring back the "fast" in Fast Food. I know the idea of making it "fresh" is to reduce waste of the product, but it takes a lot longer to grab a meal than it used to. If you're going through drive-though then you're in for a longer wait if the inside of the store is busy, and vice-versa when drive-through is busy. It used to be that you would walk into the store, order, and be out the door with your order in under 2 minutes. Now you place your order, take a number, wait in a second line till your number is called out. It's bullshit

      I remember when Maccas had their timer at the counter. If they didn't make your burger within the allotted time, it was free. Probably very stressful on the staff, with a deadline and customers trying to cheat the system, but it at least felt faster than what it does today. Even getting a McFlurry can take ages, and they no longer stir it using their spoon machine!

    In the town where I work, there are two Maccas, both within 2-3 minutes drive of each other. The town isn't that big (about 9 minute drive, end to end with 3 lots of traffic lights and about 4 minutes across through residential streets), so one is all you'd ever need.

    The second, newer one is right on a massive truck route that spans from Melbourne to New South Wales, but they didn't make it truck accessible. To get in, you have to turn down a small side street, right again into the car park, then find a set of parking spots long enough for a truck. This is in comparison to the older Maccas where you could park across the road (in a spot big enough for 2-3 trucks), scuttle across four lanes of traffic and get your food. The newer one is set to close because of lack of customers. If they had have put in easy truck / vehicle access, they would have had more business. Whoever designed it might not have thought it through too well.

    On top of that, the first Maccas is a cramped, dirty hole. You go there on a Friday or Saturday after 11pm and there's rubbish all over the ground and a mess of drunken idiots hanging out there. The place was 24 hours, but went back to regular times after a security guard got a crowbar in the head, but soon returned to 24 hours after they stepped up security.

    The other Maccas, closer to home is poorly lit outside but cleaner inside and a nice place to sit and have a late night feed.

    So perhaps Maccas needs to stop trying new menu things and concentrate on where their key restaurants are and work to improve them. Swanston street in Melbourne could use with more seats and a clean.

    We're all doomed to die.

    Clickbait headlines aside, if Mcdonalds introduce the following two items they will have a profitable business model in Australia until the extinction event:

    Bacon & egg Mcmuffin, with soft egg and wholemeal muffin, available 24/7

    Beer.

    I don't go because it's too expensive now. Simple as that. I want cheap, I go to HJ's. If I want to spend $10 on fast food, I go to KFC because I get way more food for that $10 than I do at Maccas (and it tastes better).

    I tried their CYT options once. Yeah no. Not paying $15 for a pretty average burger and fries from Maccas again. For that price I'll go out somewhere nice (like I did today for lunch!) and get a big, awesome burger with fancy ingredients and vintage cheese and shit for $15 with chips.

    I have a Maccas nearby in Blaxland. I go there often. Too often.

    Here are my observations:
    - As the article suggests, Maccas is throwing everything at a wall to see what sticks (like pickles). The menu is massive, and I think the main problem is that they're too afraid to get rid of some of the original favourites.
    - Create your Taste is amazing. Really delicious, and has fooled me into thinking it's at least a little bit healthier.
    - McCafe is really nice and welcoming, and the Coffee is very decent. It would be nice to see some more savoury options like the toasties that are more home-style.

    Suggestions (not that I know how to run a business), and perhaps it's all part of their roadmap..
    So I actually think they're going in the right direction, but they're not committing to it enough. I think they should get rid of their mid-range stuff like the Chicken & Bacon deluxe, Southwest BLT, etc. They're really nice products, but they're getting closer to CYT. Next, they should make CYT available at the drive through, using specialty builds as the baseline. CYT needs chicken and perhaps an option to make a wrap instead of a burger (different types of wrap bread would be great.. maybe even rice paper as a health option?).

    I don't know how they'd get rid of their legacy / breakfast menu, but at least there's a clear distinction between their classics and their new flagship products.

    -R

      if CYT was an app so I could order in advance and just pick it up through drive through it would be perfect. Honestly its 90% as good as grilld, for the same price, without the inconvenience.

      Chicken CYT is coming tomorrow (21st Oct) as well as CYT salads. They had to work out some kinks in the system because they rolled CYT out so quickly.

      There is also an app launching tomorrow - but I don't think it lets you order in advance, but you can create a burger and then scan it into the order kiosks.

    For me sport isn't just about exercising for health or for aesthetics. Sport is about fun and competition and character. So eating McDonald's afterwards as a kid didn't undo what I got out of McDonald's. I wasn't a fat kid though so I didn't have to look at food in that way.

    As an active adult although I don't play Saturday morning sports I play sports and frequently exercise (daily) and still have Maccas on occasion (once a week or slightly less). My motivation is now health and aesthetics in addition to the above other benefits but I still don't have to worry about 'undoing the good' because I am very healthy and can easily fit the McDonald's into my diet. It essentially passes a cost benefit analysis.

    The average bloke will spend upwards of $15 bux per maccas visit.

    Id rather and DO prefer to drive another 10 minutes to a proper italian pizza place and get a woodfired beautfy for 20.

    Or buy 2 kilos of mussels for 12 and make a 5 min mussel soup?

    Or buy fish and chips for 10 bux inc. massive burger, chips and drink.

    Basically Maccas, Kfc and hungrys are all too expensive for their plastic food and people are clueing on.

    WHY WOULD I BUILD A BURGER AT MACCAS when there is such a foodie/burger culture here in Melbourne atm. for $15 bux instead of maccas i can get a premium FUCK OFF burger from a reknown burger joint, with frieds that have bacon, cheese sauce and challots?

    GG maccas. Your time is up

    I actually like the CYT initiative. I've got some really yum stuff from it, and I don't think the price is exaggerated when compared to other "fancy burger" shops.

    What competiton does mcdonalds have in Australia? KFC, Hungry Jacks and not much more. The choice here is horrible compared to North America. Mcdonalds build your own burger are not bad but VERY expensive. But then again it is impossible to get a good burger in this country.

    Create your taste is amazing. Best burger ive ever had. They are onto a winner with that in my opinion.

    McDonald's going bust? I can hardly think of anything I care less about.

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