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Why DO I Write All These Posts About McD’s?

My long-suffering sister and fellow Chef, Erin, asked me, rather accusingly I thought, why I’ve been writing so many posts to this blog around McDonald’s. The answer is simple: They’re the biggest Burger Chain and the most desperate to preserve their precarious share of a market niche that’s ready to break…

McDs McCafé outlet - © Bernard Boutboul via FacebookMcCafé – another McDonald’s attempt to break out of the old Fast Food mold
invade the Upscale Coffee market.

Yes, McDonald’s is, indeed, the biggest Burger Chain in the world but not the oldest. White Castle pre-dates McD’s by decades: White Castle started up in 1921 and the first McFranchise only opened in 1953. And McD’s is the second biggest employer in the world with about 1.5 million employees around the globe, second only to Walmart, which employs about 1.9 million. No matter how you look at it, McDonald’s is a force in the Fast Food sector.

Being the biggest player, McD’s has the most to lose as other players worm their way in and steal market share. This past year, in fact, McDonald’s posted its first quarterly losses and sales have been more or less flat.

Comes the crunch…

Now. we all know that huge organizations like McDonald’s face constant pressure from their shareholders to expand market share and grow sales. Greedy, greedy shareholders! Nevertheless, sales and market share are the barometers by which corporate health is measured.

And McDonald’s – accustomed to leading the pack in sales and market share – has been frantically trying to reinvent itself over the past few years to maintain its place in the Fast Food Universe. We’ve seen a cascade of new menu items – especially limited-time, season offerings geared to the tastes of specific regional markets. The iconic Big Mac finally settled down and had a family – three sizes of Big Macs for every taste and capacity. Most courageously, McDonald’s is now rolling out its long-awaited ‘restaurant of the future’ concept across the U.S. That’s the whole-store revamp that includes touch-screen ordering and payment kiosks, ‘homier’ decor and – GASP! – table service.

The other guys are in the dust…

That leaves the competition eating McD’s dust, at least for now. None of the other Fast Food giants have rushed to copy or otherwise counter McD’s bold reinvention initiative. I think they’re waiting to see if the ‘restaurant of the future’ flies or crashes. And they’re betting on a crash. That would leave McDonald’s in a much worse position than the one they were in when they started.

Maybe the other guys are actually waiting to jump in and pick up the pieces when Humpty McDumpty has its great fall. I don’t think it will come to that. But things will change drastically in the Fast Food Industry and in other business sectors. We can’t go on forever expanding market share and growing sales. American Fast Food giants have infested the whole world and there’s no place left to expand except, maybe, the Moon or Mars. How will it all pan out? I don’t know. But I do know this: Unless shareholders learn to satisfy themselves with an adequate return on their investments rather than the spectacular results they’ve been used to over the past couple of decades, something’s got to give.

As I said…

McDonald’s is the biggest player and has the most to lose. It’s my barometer for gauging where the Fast Food industry is going. When McD’s does something, they usually do it first and that makes it comment-worthy to me. Just remember: If I ‘review’ a new McDonald’s menu item, remember it’s always in the context of the company’s influential place in its niche. And an indicator of what’s going on in the Fast Food universe as a whole.

~ Maggie J.