Are Changing American Tastes Slowing McDonald’s Down?

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Moscow Russia McDonalds
McDonald's meal in Moscow
Moscow Russia McDonalds
McDonald’s meal in Moscow

McDonald’s (NYSE:MCD) hasn’t been having a good time lately. It would be safe to say that the company famous for its golden arches is not ‘loving it,’ at least in the past few years. What is the problem? Declining sales? Declining same-store revenues?

In fact, regardless of the economic indicator or statistical factor you consider, McDonald’s is not looking good. Sure, it still racks up sales in the billions of dollars, but a company this big is assessed by its growth projections. The company is failing to grow. Worst of all, the company appears to lack direction.

It appears there is an internal blame game happening as Mcdonald’s stock gets hammered. Its recent quarterly earnings didn’t win it many friends. In fact, McDonald’s stock sank due to its disappointing sales quarter. This marks five straight quarters of declining sales. What is going on?

It is easy to blame former CEO Don Thompson, who was recently pushed out. After all, he was the head of the McDonald’s family and should have been on the ball as to where to take the company. At the very least, he should have had a clear vision that the company can work toward. However, simply heaping all of McDonald’s problems on one person isn’t going to cut it. What McDonald’s is facing is a deep and profound change in how American families look at fast food.

The whole idea of fast food, of course, is McDonald’s innovation. This is what put McDonald’s on the map. You go to a drive-thru, you place your order, and in a very short period of time, you have food ready and you can enjoy it on the go. This is what fueled America for several decades. Not surprisingly, McDonald’s stock and its shareholders were handsomely rewarded. It is one of the planet’s biggest corporations for a good reason.

Unfortunately, tastes do change. Instead of looking at a fast food restaurant as offering many different things on the menu and being a jack of all trades, consumers are expecting something different now. Consumers are looking for restaurants to focus on a tight range of menu items. Interestingly enough, consumers are also expecting to wait a little bit longer for those menu items. Why?

Consumers expect a higher level of quality and satisfaction from their food. This is not to say that people don’t enjoy Big Macs and McDonald’s fries. They do. The problem is McDonald’s has become so generic that the focus really is on the speed of service. Not surprisingly, specialized competitors like Chipotle and Five Guys are eating McDonald’s lunch literally by taking a little bit longer. People are looking for quality. People are looking for more control of the menu. In other words, people are looking for their expectations to be managed more closely. This is kind of weird, considering that we are talking about the United States here – the land of freedom of choice. However, based on McDonald’s recent fate, it seems that instead of freedom of choice, people are looking, in many cases, for freedom from choice.

People are looking for quality. People are looking for more control of the menu. In other words, people are looking for their expectations to be managed more closely. This is kind of weird, considering that we are talking about the United States here – the land of freedom of choice. However, based on McDonald’s recent fate, it seems that instead of freedom of choice, people are looking, in many cases, for freedom from choice.

 

1 COMMENT

  1. McDonalds food is down right nasty while their soda is watered down so badly you may as well drink water. trying to tell people they’re lovein it when they’re rejecting it is one of the most retarded ad campaigns in history.

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