How McDonald’s Plans to ‘Reset’ Its Struggling Business

What will it take to manage a turnaround? The chain is pondering "hot, fresh food" and re-imagining millenials, among other things.

How McDonald’s Plans to ‘Reset’ Its Struggling Business Photo (cc) by Vacacion

Americans’ love affair with McDonald’s is fading. In fact, with a sales slump that’s persisted for six straight quarters, some may argue that the love is long gone. But McDonald’s has a plan to win you back.

In a 23-minute video released Monday, McDonald’s president and CEO Steve Easterbrook said the burger chain is taking steps to reset and turn the tarnished Golden Arches around.

“No business or brand has a divine right to succeed, and the reality is our recent performance has been poor,” Easterbrook said in the video.

The changes Easterbrook discussed, which are also described in a McDonald’s press release, have less to do with food than image and operational restructuring.

“As we look to shape McDonald’s future as a modern, progressive burger company, our priorities are threefold — driving operational growth, returning excitement to our brand and unlocking financial value,” Easterbrook said in a statement.

McDonald’s turnaround plan includes restructuring its global markets and franchising more of its restaurants. Currently about 81 percent of its locations are franchised. McDonald’s wants to see 90 percent of its restaurants franchised by 2018. Easterbrook said these changes will help the company cut about $300 million in annual costs.

According to The Washington Post, McDonald’s just launched an on-demand delivery system via Postmates in New York City.

“Mickey D’s also said it plans to win back spurned diners with ‘a recommitment to hot, fresh food’ and a refocusing on its target clientele; at one point, Easterbrook said there would be ‘less sweeping talk of millennials as if they’re one single group,'” the Post said.

Since Easterbrook took over as the McDonald’s CEO in March, the struggling restaurant chain has changed up its menu, opted to serve only chicken free of antibiotics used on humans, tested all-day breakfast in select areas, and agreed to bump up its wages at company-owned U.S. restaurants.

McDonald’s has struggled in recent years in the U.S., as consumers have flocked to restaurants like Chipotle Mexican Grill, Panera Bread, Shake Shack and Five Guys, opting for food they perceive as “fresher.”

What do you think of McDonald’s turnaround plan? Does it go far enough? Share your comments below or on our Facebook page.

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