The golden arches have regained their sparkle. McDonald’s has been battered by tell-all books, Hollywood movies and incandescent dietary experts — but the world’s largest fast-food chain has bounced back triumphantly.
The 51-year-old Chicago-based restaurant behemoth this week announced that its sales had rocketed on both sides of the Atlantic, sending its shares soaring to a six-year high on the New York Stock Exchange.
In a self-congratulatory declaration, it said diners were flocking back to its restaurants, lured by healthier menus featuring carrot sticks, apple dippers and walnut salads. British restaurants were singled out as among the biggest improvers.
Among the first healthier changes made to the range was to improve its chicken nuggets with a guarantee that they were made purely from white meat. At British restaurants, recent innovations include salads, fruit bags, deli sandwiches and milk. Its eggs are free range, the lettuces are all fresh icebergs and beef comes purely from the forequarter or flank of a cow.
Packaging at McDonald’s will soon contain nutritional data, although some have criticised the company for leaving out data on fat and sugar.
There is improved coffee and stores are being redecorated, replacing red and yellow colours with softer browns and mauves.
Its revival represents a stunning marketing turnaround. Just three years ago, McDonald’s was widely written off as a has-been that was fuelling an obesity epidemic by serving up outdated helpings of greasy food. In 2003, it dipped into the red for the first time in its five-decade history.
The filmmaker Morgan Spurlock graphically demonstrated the risks of a diet of Big Macs in his documentary Super Size Me, which culminated in a doctor advising him that his liver was ”turning to pâté”. To add to its woes, two chief executives of McDonald’s died in quick succession — one from heart disease, the other from bowel cancer. But a ”Plan to Win” intended to reposition the chain as health-conscious, exercise-friendly, environmentally aware enterprise has paid off.
McDonald’s chief executive, Jim Skinner, said: ”Our plan to win is powering sustainable momentum in our business with every area of the world once again posting strong comparable sales growth. We are increasing relevance, enhancing menu variety and improving customer convenience.”
Over the third quarter, comparable sales at 30 000 McDonald’s restaurants in 100 countries increased by 5,8%. In Europe, the improvement was 7,6% with a 9% jump for the month of September.
Not everybody, however, is convinced. Some argue that McDonald’s changes are largely cosmetic and that the real reason for its improvement is simply that it is selling more burgers and fries than ever.
Critics point out that less than 10% of sales are from salads and sandwiches. One report recently suggested that, for every salad, McDonald’s sells eight double cheeseburgers. In Britain recently, the company even launched a bigger Big Mac.
Tim Lang, a professor of food policy at City University, London, said: ”This is a very clever company. They weathered mad cow disease a few years ago and they’re acutely aware of the need to retain public trust.
”But they’re also acutely aware of the need to retain their original market. This is a downmarket, fast service, low-price chain based on pulpy, fatty food. They can’t suddenly become upmarket, haute cuisine delivering organic food — much as we’d like them to.”
Experts in the United States say that McDonald’s turnaround has been based on a shift from opening new stores to improving sales at existing outlets. A new range of snack wraps, designed to be eaten between meals, has boosted takings in traditionally quiet morning and afternoon lulls.
But, McDonald’s honeymoon may not last long. A fresh challenge is looming at cinemas in the shape of Fast Food Nation — the movie. Starring Patricia Arquette, Ethan Hawke and Avril Lavigne, the film depicts life on the inside of Mickey’s — a fictional fast-food chain with a burger called The Big One. It is unlikely to pull any punches and McDonald’s is gearing up for another fight. — Â