It’s well known that McDonald’s is in a full on tailspin with seven straight quarters of declining sales. Their latest attempt to resurrect the failing brand, the “all day breakfast”, has been met with harsh criticism from franchisees. Apparently there was a reason you couldn’t get breakfast all day long–franchisees say that the all-day breakfast is a complicated kitchen process. The move is the antithesis of promises made by CEO Steve Easterbrook to simplify the menu. So while all-day breakfast might be great for Michael Douglas, McDonald’s owners and employees are not “lovin’ it.” https://youtu.be/s1QQjZbX9KE The market is speaking loud and clear and it’s saying “we’re tired of your crappy food-like substance and pink slime.” With the rise of fast-casual restaurants like Chipotle, Five Guys and Noodles and Company, Micky-Ds is trying to play catch-up. Along with it’s big idea of all day breakfast, McDonald’s also plans on featuring “hormone-free” chicken which is not only laughable, but it’s too little too late. In fact most financial experts agree that there’s probably no way to right the sinking McShip. Plus, healthy certainly is not the McDonald’s brand. Trying to redefine the franchise from ultra-cheap to pseudo-healthy-but-not-really will likely confuse it’s customer base and lead to further decline. It’s interesting to note that in 1998 McDonald’s bought Chipolte but sold it off in 2006 for $1.5 billion. Today Chipotle is worth over $20 Billion and is one of the fastest growing restaurants in the marketplace. Even Forbes believes the clock is ticking: “In fact, the odds are wildly against McDonald’s this time. Because this isn’t their first growth stall. And the way they saved the company last time was a “fire sale” of very valuable growth assets to raise cash that was all spent to spiffy up the company for one last hurrah – which is now over. And there isn’t really anything left for McDonald’s to build upon.” About 30 franchisees were surveyed by Nomura analyst, Mark Kalinowski and their responses did not paint a pretty picture. One franchisee explained that the company is “in the throes of a deep depression, and nothing is changing. Probably 30 percent of operators are insolvent.” Another wrote ” The system may be facing its final days.” This is good news for folks looking for healthier options. With the decline, and seemingly inevitable implosion of McDonald’s, it will cause market share to shift to more health conscious fast casual restaurants creating more options and more opportunity for customers and business owners alike. While we can’t know for sure what the future holds for the golden arches, we do know that their number-one priority is to the share holders–not their customers. That will likely mean that cutting costs and corners are inevitable. You can expect even cheaper (and less healthy) food, a slimmed down menu, and fewer restaurants with fewer human employees. Either that or McDonald’s will have to completely re-brand and change their ways from top to bottom, which isn’t likely to happen. The opportunity is huge for healthier fast casual restaurants to take over the marketplace.]]>
