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July 14, 2018

Dumb and Dumber

The year was 2000 and a McDonald's corporate PR person uttered the dumbest words
ever to come out of the Oak Brook headquarters.

By the end of 1999 most McDonald's USA stores had implemented the "Made For You"
cooking system. Reporters and analysts observed that suddenly the service was slower 
and lines were longer.

When asked about service times the corporate PR person said, "People don't mind 
waiting longer if they know the sandwich was made just for them".

Pre-MFY 1999 same store sales were a healthy +4.0%, 2000 +1.5%, 2001 +0.5%, and 
2002 (- 1.5 )%.

Customers on were voting on MFY with their feet.

This week Restaurant Business Magazine published an interview of one of McDonald's 
chefs. Editor Jonathan Maze asked about menu innovation and its impact on service 
times. The chef talked about "indulgent moments". Another editor asked, "So it's the 
opposite of fast-food?'

Answer: "When the food is right, people slow down"

Yikes! Now, it's his job to think that way. But, if that thinking permeates the minds of 
more than a few people at the new headquarters McDonald's USA is about to take a trip
back to the years 2000, 2001, and 2002.

By the way, desperate to get sales turned around, management strong-armed Operators
into launching the original Dollar Menu in the fall of 2002. Same store sales in 2003 were 
a robust +6.4%.

So "Made For You" was the father of the Dollar Menu.

This is a recorded interview and is only seventeen minutes long. The discussion on speed 
begins at the eleven minute mark.

How McDonald’s is working to change its menu by Restaurant Business Magazine
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11 comments:

Anonymous said...

One of My Greatest concerns as an Operator is the response by a Leadership that clearly does not understand the Customer. Each time they hear something they over react. A few examples are:
Customers want Healthy Food - So we remove Fats & Taste = Less Customers
We Discount
Customers want Hot Food - So we bring in Carter Hoffman cabinets & Qing ovens = Terrible Food = Less Customers
We Discount
Customers want Fresh Food - So we bring in MFY = better Food for awhile BUT much longer waits
We Discount
Custmers want Expresso - So we bring McCaffe Line = Much longer waits
We Discount
Customers want Bigger Burgers = QP Deluxe = could not give them away
We Discount
Customers want Healthy / Fancy Food 2.0 = We add Signature / Chef Crafted = Longer waits
We Discount
Customers want to Craveable moment = We add more Stuff = Longer Waits
We Discount
Customers want Fresh Beef = So we Add it = Longer Waits
So Now You guessed It we Discount.

Over the Last 20 years I have built Sales with 2 things in Mind
1). Taking Care of the Kids = Ronald + PlayPlaces + Happy Meal Nights + Ball Teams
2). Faster D/Ts = All 10 are over 72% = Staffing D/Ts & Kitchens
But with adding The Millstone on speed and Cutting Ronald and Playplaces it becomes harder each day.

What else can we Discount? We have already hit Sandwiches & Drinks - Oh I know Fries. SHaking My Head (SMH)

Fellow Operators Please Way in.

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

Change started with Easterbrook is picking up a lot of momentum. There is no longer a Florida region as it has been combined with the Atlanta region. Florida was MCD's first billion dollar region. Several high priced people are now gone and the regional palace is being closed down. All of this in my opinion is a good thing. I think that had Cantalupo lived he would have put the company on very much the same track. He is on schedule to reduce MCD annual cost of operations by one half a billion dollars per year. In my opinion that is pretty remarkable. It demonstrates how poorly the company had been run for many years. Going forward, adjusting to the change in management thinking will be awkward. The operators relationship with the company will be much different. Focus will be placed on the details in the franchise agreement. They will use elements in the agreement rarely used in the past. Like exercising their right of first refusal on store sales to implement the diversity policy or simply to get unwanted operators out of the system. Succession planning with sons and daughters may be a thing of the past it will be completely at their discretion.
Don't take anything for granted. Having as many as five consultants shopping your stores unannounced in all day parts will be a big adjustment. Weak or marginal managers will feel a lot of pressure as will the operator. It's going to be all about sales increases. Store's underperforming company goals will be given to other operators until they do meet sales goals. Company employee's will be under the gun as well and several will not make it very long. Executives in Chicago are on big time bonus programs mostly tied to sales increases. They are going to do whatever it takes to get those increases. What is remaining of the coop's will be under a lot of pressure to discount, reinvest and have fully trained store staff. Store's nearing rewrite will have ridgid standards to meet that will be expensive. Operators resist at their own peril. I saw a third generation MCD operator family selling a store to a fully qualified family member where the company exercised their first right of refusal and sold the store to a minority. It was shocking and unnecessary but they are sending the message. Sales increases and operations in all day parts will be the focus. I don't know if MCD can keep this pressure on a long term basis. They will lose people as they usually do in projects like this. Sales increases and stock price will be the focus.

Anonymous said...

First posters comments are right an on the mark; good job!

I open Mobile offers every couple of days and just shake my head I guess corporate folks feel they can give away the food we pay for coming in the back door; although I have lost all faith in OPNAD reps to make the right decisions I am not even sure they vote on the mobile app offers.

Anonymous said...

Could you please change the font colours . It is impossible to read the red on blue and grey colour comments on a mobile phone . Many thanks

Richard Adams said...



Thanks for pointing that out. I made a change so it displays the website itself, not a "mobile version". See what you think.

This website was originally built in 2006 before smartphones were in general use. The first iPhone was launched in mid-2007. My hosting company made a mobile version available about five years ago but I've paid little attention to that version.

Maybe I'm stuck in 2006 but I've always envisioned visitors using a full-size computer or laptop. I'll ask around to see how many are using their phones.

I carry a smartphone that could launch the space shuttle but other than checking my E-mail I rarely use it to surf the web. Of course, I'm rarely far from a desktop on which to do my surfing. Going from one of my big monitors to the small screen is frustrating.

But then I'm not a busy McDonald's Operator moving from store to store.

Please let me know what you think of the new display. I have very few options in managing the mobile version but I don't foresee spending a lot of effort against mobile.

Call me old-fashioned.
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Anonymous said...

SO glad I got out in time with some cash in my pocket. Is McD about to go the way of Burger Chef, & many others to long to list here

Anonymous said...

I read your blog daily (if not more often) and almost always on my phone

Richard Adams said...

Thanks for the feedback and thanks for being a regular customer.

Richard Adams said...

Since Burger Chef disappeared in the early 1980s I doubt that will happen to McDonald's. But, I can see McDonald's drifting backwards to be more like Burger King. That's not a prediction but most of the changes to make McDonald's "Modern and Progressive" are imitations of what the owners of Burger King have been doing over the past five years. Selling off most company stores, stripping the corporate side back to nothing, reducing services to franchisees, bringing in highly educated but unqualified executives, etc, etc.
.

Anonymous said...

I feel sick hearing today's webcast! These folks running the company are nuts, this program was run through SET team? Time to get rid of all elected SET team members they do represent the O/O community.