In 2013 the sales slide became more pronounced with comparable growth down to just 0.2 per cent. The last financial year, 2014, was even worse with comparable growth falling into negative territory - down 1 per cent and total sales dipping to $27,441million. 2015 has also started poorly with first-quarter comparables down 2.3 per cent.
At the time Easterbrook, the former head of the company’s UK and European divisions and who took on the group’s president and chief executive role this March, said McDonald’s management team was “keenly focused on acting more quickly to better address today’s consumer needs, expectations and the competitive marketplace”.
He said promotions had failed to overcome new rivals such as Shake Shack and Five Guys, which are doing well with millennial customers, and that it was starting to simplify and localise its menu, “be more responsive to consumer’s preferences” and close underperforming restaurants.
In May he announced the initial steps of the company’s turnaround plan aimed at making “McDonald’s a modern, progressive burger company delivering a contemporary customer experience”.
In somewhat simpler terms that means ‘driving operational growth, returning excitement to our brand and unlocking financial value’. "The first critical step of our operational growth-led plan is to strengthen our effectiveness and efficiency to drive faster and more customer-led decisions. We will restructure our business into four new segments that combine markets with similar needs, challenges, and opportunities for growth," Easterbrook said.
Those new segments are the US, international lead Markets including the UK and Australia, high-growth markets including China and foundational markets.
Easterbrook added: "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. It will more effectively address their needs."
This is expected to include more “convenience and personalisation” in its food offerings and following the business model in its European arm create “consistent everyday value offers, effective marketing and promotional execution to drive demand”.
It is set to offer new ranges such as sirloin burgers and an artisan grilled chicken sandwich and is testing new flavours such as pico guacamole and jalapeno. There have even been suggestions that superfood kale could be added to salads and smoothies.
It is also looking at mobile ordering and self-order kiosks to improve service. Easterbrook said: “The message is clear. The numbers don’t lie. We are not on our game.”
In tomorrow’s instalment of the brand audit we hear from Shilpa Rosenberry, senior director, global consumer strategy at retail branding firm Daymon Worldwide…