Sales do seem to be rising along with increasing transaction counts. MCD needs to be committed to not being our own biggest competitor. Closing stores is a smart thing to do because many stores should have never been opened. Their manic obsession to dominate markets hurt more than any competitor could have ever done.It is refreshing to read that they seem to recognize the huge drag created by a bloated bureaucracy. Terrible decisions were made by people with little competence following personal agendas. There are so many functions in Oak Brook and in the regions that have nothing to do with improving and selling product. In the more dynamic markets they should outsource the real estate functions. New MCD real estate people quickly become overwhelmed and make mistakes that hurt for twenty years or more.Hats off to the new leadership. Sales building and cost cutting should remain the focus. Be careful with CYT. Its a great concept in the right trading areas. It won't work everywhere.
Small SSS increases may not cover new debt and operating costs, especially when 2015 SSS are calculated against fairly high negative sales last year. Will the system even get back to 2014 sales? That remains to be seen.
Debt remains the serious problem of many negatives in the system. The operators are struggling with debt encouraged by MCD to do things that had inconsistent results, at best. Misguided marketing, impact from new stores, expensive improvements using debt, poor leadership from Oak Brook has the system continuing to struggle on the operator side of the ledger. This new leadership seems to have some greater awareness and willingness to address it but that remains to be seen. It looks like cyt is a done deal and Corp. is committing hundreds of millions of dollars to implement it. If true, the operators will have little choice but to fall in line, add new debt and some stores will not respond, hopefully many will. Like play places, MRP's and other risky projects over the years it will require more debt, more risk, better operations, higher payroll costs. However, on the bright side it could be what is needed to take MCD to a higher level. My advice is to be aggressive about reducing your debt.
Corporation is closing restaurants and some probably need to be closed but it is more amazing that a restaurant (McDonald's) cannot be profitable brining in top line sales of $1.5-$2mil something wrong with the economics. Other restaurant brands are very profitable at those AUV/top line sales.
Post a Comment