McDonald's aims to rebrand its image (stock, company, interest, costs)
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Mcdonalds is going to get rid of its junk food image. It's eliminating some unpalatable ingredients from the menu. It's supposed to remove artificial preservatives and high-fructose corn syrup from burger buns. Its actions are based on the fact that the company was losing its market share for 3 consecutive years to its wholesome rivals. Meanwhile share price of Mcdonalds shows 18.7% YoY growth, last earnings report of the company was a fifth consecutive quarter of EPS decline with $1.25 a share. The question is if such measures will help?
McDs and the other chains have put themselves in a corner. They feel that they need to chase constant growth and ever expanding profits. They have overbuilt and it is hard to find any place for growth, especially in North America. They try to pass the risk on to franchisees, but if the franchises don't do well, that game is also over.
I just do not understand the push for more and more. Why is it all but impossible to run a company with a large, steady customer base and making decent consistent profit?
Anyway, I doubt McDs is going to have a lot of success with a few menu and ingredient changes. No one eats at McDs expecting health food and I cannot see these changes bringing in a whole new group of customers. To me it seems the issue is largely price related. In my area, a couple with 2 small kids is going to need to spend at least $25-30 for the typical hamburger/chicken nugget meals. There are a lot of diners and small restaurants with good service and much better food for the same price.
I like what McDonalds is doing/planning to do. The company should have implemented these changes already but that's for another day. McDonalds is a behemoth and it'll take time to change its image of a fast food chain to a quality and healthier restaurant company. McDonalds has the money to make these changes. Hopefully the franchisees get on board and certainly store remodels will be part of the re-imaging. Stock holders need to get on board or else the chain will have a slow death. Competition is only going to intensify especially in the hamburger fast casual segment but McDonalds has the infrastructure to hit back.
People gobble down this factory farmed meat and then wonder why obesity, diabetes, and cancer is so prevalent in our society. I really wish the government would stop subsidizing this crap. This isn't "cheap" food. The environmental and health costs are substantial...
I like what McDonalds is doing/planning to do. The company should have implemented these changes already but that's for another day. McDonalds is a behemoth and it'll take time to change its image of a fast food chain to a quality and healthier restaurant company. McDonalds has the money to make these changes. Hopefully the franchisees get on board and certainly store remodels will be part of the re-imaging. Stock holders need to get on board or else the chain will have a slow death. Competition is only going to intensify especially in the hamburger fast casual segment but McDonalds has the infrastructure to hit back.
Wow. It seems like everyone needs to get on board. Customers, franchisees and stock holders. Even the competition needs to watch out.
It seems to me McDs is a hamburger and fries joint. For those who want something else they throw in fried chicken or fried fish pieces. Then there are those salty, salty fries and sugary drinks. They have to keep serving that stuff to maintain their customer base. So what are they going to do to make it healthy? Less salt, "organic" ingredients, no GMOs, fresh instead of frozen? They are still a hamburger and fries joint. They did get a boost from all day breakfasts.....eggs, cheese, bacon and greasy biscuits. Not exactly health food.
Agree with MountainBiking. Making the menu healthier serves short term and marketing interests, and positions the company for the long term with a "we're not junk food" identity that Gen X and Millennials want.
Quality upgrades should help across the board, but the real question is how franchise owners will adapt. I read a story last week in Bloomberg or WSJ that noted that volume is higher thanks to all-day breakfast and the $2 for 2 promotion, but individual order price is down because of these promotions.
McD's is no longer competing against the other fast food chains. They're in the arena with fast casual, but their stores are a bizarre mix of fast food and casual. The menu should sort out some of these problems, but it's up to marketing to bring the customers back to the stores.
Maybe my local McDs is behind the times, but I certainly don't think of them as a casual dining restaurant. That fits Paneras and a million local delis. I would guess 90% of adults who eat there order burgers, fries and sodas. The other main choices are breaded and fried chicken or the greasy egg and cheese biscuit. There are also desserts mainly fake ice cream and some sort of apple goo inside a fried cover. When you order, almost everything is already precooked and often assembled. Except for leaving off pickles or that small piece of onion, there is not much customization. Nothing is close to what I would call casual dining, or even casual fast food dining.
Don't get me wrong. I don't dislike McDs. In fact I stop by once or twice a year to get a grease and salt fix.
People eat McDonalds precisely because its cheap, quick junk food. Otherwise, there is no reason to go there. By making their food "healthy", prices will have to increase to Chipotle levels for them to compete. This will drive away MCD's main customer base. The customers who frequent MCD's want greasy, salty food with preservatives and trans-fat.
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