For several years McDonalds has suffered from slowly shrinking sales, much of which has been caused by bad publicity about the contents of their food and its potential effects on people’s health. (Not that you need to be a genius to work out that eating 20 hamburgers a week from any restaurant is going to be bad for you!)To combat this, McDonalds started to focus on salads and healthier foods; selling fruit and providing healthier options. Yet despite this change in strategy, sales have not improved as much as expected (partly due to claims that some of their salads were actually almost as unhealthy as other fast foods!); and competitors like Subway are rapidly gaining ground on the food giant. So now McDonalds have declared a back to basics approach, refocusing on their core product (I.e.: Burgers).
Instead of combating negative publicity by improving their core product, McDonalds tried to change; but are now left having to change again to recover lost ground.
John on July 20th, 2006 at 5:52 am
You got me wondering so I went looking for facts.
Quoting McDonald’s 2005 Annual Report, “Marking our third year of progress under our Plan to Win, McDonald’s achieved 32 consecutive months of positive global comparable sales as of December 2005 - our longest streak in more than 25 years”.
McDonald’s Reports Strong March and First Quarter 2006 Sales
Global comparable sales rose 5.3% in March; 5.2% for the first quarter – marking McDonald’s 35th consecutive month and 12th consecutive quarter of positive global comparable results
U.S. comparable sales increased 6.6% for the month and quarter
Europe’s comparable sales were up 1.6% for the month, 2.0% for the quarter
First quarter 2006 earnings per share is expected to be about $0.49, which includes $0.01 per share of negative foreign exchange impact
Global comparable sales increased 5.9% in June, 5.5% for the second quarter
U.S. comparable sales increased 5.2% in June, 4.2% for the second quarter
Europe comparable sales increased 4.5% in June, 6.3% for the second quarter
Preliminary second quarter earnings per share is about $0.67, which includes $0.10 of income from the sale of Chipotle Mexican Grill shares and $0.02 of expense related to impairment and a one-time impact from a tax law change. Second quarter 2005 earnings per share were $0.42, which included $0.09 of expense due to HIA.
Looks like they’er doing ok.
Takuya at Amigo Health on July 23rd, 2006 at 3:00 am
Hi Dave,
I believe it was in Manhattan, but I saw McDonalds creating a very trendy looking store. It almost looks like …. Starbucks and it looks very nice on TV.
I am not sure how its customers will perceive it but will be interesting to see.
Takuya
Unky Newy on September 14th, 2006 at 9:53 am
People live a little, it tasted so damn good. BK 4eva!