McDonald’s used to be the main burger chain and the global emblem of American consumer capitalism but these days the golden arches of the company look a little tarnished. After a decade of expansion, costumers around the world do not seem to be lovin’ it anymore. In 2013, sales dropped by 4% in Europe and 3.3% worldwide but it is in the US, where the crisis runs deepest. It has seen 12 straight months of declining sales and since 2001, the number of Americans, ages 19-21, has dropped by 13% (Rankin, 2014). As a result, they have been losing market share to other fast food chains such as Burger King, which has been gaining market share with a simpler and cheaper version of the McDonald’s menu and they have being squeezed by more upmarket “fast-casual” restaurants such as Chipotle Mexican Grill. They have been luring younger customers away from McDonalds by offering higher quality food, a high level of customization (such as the option to choose the ingredients in a burrito or burger) and table service.
These issues stem primarily from their food quality. In fact, according to a poll in 2014, McDonald’s hamburgers were named the worst in America based on the responses of over 32,000 subscribers (Consumer Reports, 2014). As millenials demands higher quality, healthier food and they have been taught from a young age that McDonalds makes unhealthy, junk food, their diet preference has been shifted towards healthy, organic and sustainable foods. Therefore, a current problem McDonalds is facing is the ability to attract and retain new, younger customers that are more and more aware of the impact of food on their health. Moreover there is a publics’ negative perception of the brand that reinforce the idea the competitors are better than McDonald’s. Negative perception of McDonalds originated from the movie “Supersize Me”. It featured a filmmaker named Morgan Spurlock who ate breakfast, lunch and dinner at McDonalds for 30 days straight. The results were unprecedented weight gain, liver damage, low energy levels, depression and more. In addition, he conducted an experiment to see what happens to McDonalds products over time. Over a span of 10 weeks, the food remained intact and did not decompose. Therefore, the movie brought awareness to consumers about the many preservatives and chemicals contained in the food.
Before the company can grow again, McDonalds has to regain their dominance in the market and transform their image. By offering healthier options they can attract the new, younger costumer as they are “willing to pay premium prices for products they perceive as healthy” (Horovitz, 2015) and become more competitive. In addition, younger costumers want customizable options and so McDonald’s should restructure the menu to allow customers to customize their order. McDonalds has begun implementing this idea through the “Create your taste” campaign: customers can select each and every ingredient on their burger from a computer kiosk in line. What concern the negative perception due to their food quality, McDonalds can alter the image by changing the focus of their operations. They can appeal to corporate social responsibility by highlighting their philanthropy work such as Ronald McDonald House, which supports children facing serious medical situations. McDonalds could also emulate TOMS and include corporate social responsibility into their core business model. McDonalds could start an initiative that provides food for people living in poverty, similar to TOMS “one-for-one program” which helps a person in need with each purchase. Promoting this new image through social media would require minimal costs as they already have an established online presence.
Implementing all these changes will improve their ability to attract younger customers, their company’s image and global reputation. Would be McDonald’s able to face the challenge and become again THE burger chain?