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Wednesday 06 Nov 2019 , 3:44 pm

McDonald’s: Has America Stopped Lovin’ it?

The American fast food joint, McDonald’s, that became famous for its tasty burgers and quick service is no more at the top of its game due to multiple reasons

McDonald’s Corp’s share price dipped lowest in the last six months on Monday. The triggering reason was the dismissal of their Chief Executive Steve Easterbrook over consensual relationship with an employee, which violates company policy. However, experts suggest that the McDonald’s has also started seeing low sales due to various quality and management reasons.

Chicago-based McDonald’s is one the world’s most recognizable brands. It recently celebrated the 40th anniversary of its ‘Happy Meal’ and carries a reputation for being a family-friendly food joint. The company that started out with just one burger stall in 1948 has grown into more than 35,000 outlets across the world. Their emphasis on quick service and a standardized menu helped stay profitable. The company faced a wobbly period in early 2000s, but the firm’s share price from $12 in 2003 rose to $100 at the end of 2011.

But now, the yellow clown has lost its charm. The company is seeing a decline in global sales since last July. The fast food giant has been seeing its reputation going down mostly due to operational mishaps. Last July, sales in China fell sharply as a supplier was found using expired and contaminated chicken and beef. Recently, Japanese customers reported finding plastic in their food. The company also faced issues in Russia where outlets were temporarily closed by food inspectors. One of the reasons that came up was that this was done in retaliation for American and European sanctions against Russia over its military intervention in Ukraine. This issue became so big, that some Russian politicians called for the chain to be shut down completely in the country.

The menu of McDonald’s Corp has also been slammed to have grown too big to succeed. The offerings have crossed 120 in recent years due to additions of oatmeal, snack wraps and lattes to its US offerings to appeal to a wider swath of customers. But the menu only made the kitchen operations more complex.

Adding to the pressure, rival chains in the US, including Yum Brands Inc’s KFC and Restaurant Brands International Inc’s Burger King added new menu items, like meat substitutes and plant-based burgers that McDonald’s introduced quite late.

Getting into the work of Easterbrook at McDonald’s, he is said to be the one who turned around the operations in the UK, by refocusing on burgers and changing the brand image to debunk the unappealing rumors about its food. In fact, Easterbrook was also one of the rare CEO’s that McDonald’s has had, as he came with an experience of running restaurant chains.

During his term, McDonald’s also remodeled 14,000 U.S. restaurants to add digital ordering kiosks, pay-and-pickup services and mobile ordering and partnering with app-based delivery services like Uber Eats, DoorDash, and GrubHub Inc.

Now, the load of making the brand everyone’s favorite again lies on Chris Kempczinski, the most recent president of McDonald’s USA who has been named the company’s new CEO, effective immediately.

McDonald’s will surely live on indefinitely as it remains an iconic brand like Coca-Cola. And taking the business ahead, there are still many untapped markets such as Africa which that can present opportunities.

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By Meeta Ramnani

Meeta Ramnani

Meeta develops credible content about various markets based on deep research, opinions from experts and inputs from industry leaders. As the managing editor at Smart Market News, she assures that every piece of news and article adds to the knowledge of decision makers. An avid bike rider, Meeta, is a postgraduate from Indian Institute of Journalism and New Media (IIJNM) Bangalore, where her specialization was Business Journalism. She carries experience from mainstream print media including The Times Group and Sakal Media Group.

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