August 29, 2018

Are McDonald's USA Same Store Sales Doomed?


An analyst buddy sent me the above picture asking for my feedback on this new product test. For the 500th time I had to explain that I don't track or pay much attention to new product tests at McDonald's and that new products often do more harm than good.

This is obviously a picture of a tray liner from one of the test stores. What caught my attention was the term, "made to order right in our kitchen".

Here we are again. Made to order means slow service, pure and simple. And McDonald's can't build sales selling slow food.

There's a reason the average Five Guys barely does $1 million a year, they are dog slow, almost deliberately. There's a reason the average Chick-fil-A does almost $4.5 million, their service is blazingly fast.

No amount of discounting or food giveaways will keep McDonald's USA sales from declining to Burger King levels if HOTG or "made to order" becomes the operating standard.
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6 comments:

Richard Adams said...

QSR mag 2016 sales data - https://www.qsrmagazine.com/content/qsr50-2017-top-50-chart?sort=2016_us_systemwide_sales_millions&dir=asc

Anonymous said...


Face it, your Brand is not what it was, and you have to face reality. You can’t discount your way to real success. You are taking advantage of the customer by offering the deep discount. No one needs $1 mcchickens or $1 large soda.but you take advantage of them and make us sell it. Why not sell cheap salads? Because you know that salads do not appeal to the consumer, the way salt and fat do. Stand up to Wall Street, have a conscience, and do something good for humanity, stop the discounting.

What is the end game of this value war? Cat and mouse for the next few decades with Burger King and Wendy’s? If I have to read another opnad explaination of “well, the value blankety blank did not perform as expected, so we are gong to heat up this or that. you sound like a broken record. When does it end? Grow up, and run a responsible company that cares about humanity and the environment. Or at least buyout some of the competitors with all your Wall Street profits. Greedy company.

Why discount your way to success? Why $1 coffee? Legitimately build your breakfast business, with better food, new food. Do a $1 small coffee instead.

Keep those “leadership” operators in their stores! They need to run better operations, and be a better employer. Eliminate OO leadership now!

This OO is becoming unhinged. Marketing is evil. This Brand is not “fun”, it’s cold hearted, and soulless. You all will get what you deserve. Your karma will run out.

. The company does not feel like a modern, progressive brand with all this discounting. You are like a wolf in sheeps clothing. It’s just a disguise with the modern buildings, EOTF, etc. let’s be modern and progressive around our pricing strategies. Why are we chasing switchers- seems desperate to me.

My opnad rep is not representing me. He just goes along with everything the company wants. Never communicates.

Cashflow is not tied to guest count discount strategies. You may think it is, but the discounts hurt everyone except the Shareholders, suppliers, and the Company. You hurt the consumer by taking advantage of their inability to refuse the cheap food, which leads to global health problems. You hurt the OO by reducing margins. Deep discounting only attracts switchers, and switchers are not loyal. (Chick Filet does a great job with their business.) You say we are now all focused on OO cashflow, but you are also focused on building guest counts by deep discounting which is contrary to cashflow strategies. You may think you can build cashflow with deep discounts, but it’s a losing game for us. We have to staff more to make more cheap food, to make some mythical break even, while the consumer suffers from obesity, and healthcare issues. You hit a growth target this year, but you then have to double down for the next year. Again, the OO loses in the face of increasing wages, and your high rents.. Remember, our food is already discounted, and is the cheapest food you can buy from a restaurant even without the deep discounts. Ray did everyday value, not deep discounts. Get a conscience, and develop some courage to do the right thing, instead of getting bullied by Wall Street. Your discounting is a classic legacy. Let’s put it to bed once and for all

Richard Adams said...

"this BBV 2020 is NLC endorsed and operator driven"

As many have commented here, just because something is NLC endorsed doesn't mean it is operator driven.
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Anonymous said...

This thing might have been NLC, OPNAD & NSLC officer endorsed, but certainly was not operator driven. We were held Hostage and Forced to sign the Damn letter. When you have No Choice or you loose equity then that is Theft at the highest level. Now we are watching our Equity vanish before our very eyes by negative sales, Higher Debt to make these improvements and a marketing plan that is dead on arrival.

And Finally, we have a Field First approach that NO ONE has any idea what is going on. We are spending valuable time in Chaos. We have McDonald's Officers calling and coercing Operators on voting for Deep Discounting at CoOp meetings. This whole brand has become a Joke. "Beam Me Up Scottie because there is no intelligent life left in this company"

Anonymous said...

Modern and progressive would include the company “investing” into O/O’s ability to attract and retain higher quality people. Our business model DOES NOT support the salaries needed to compete with Chic, Hobby Lobby, Buccees gas stations.

If they’re so interested in modern and progressive and attracting and retaining the best available they’re going to have to allow us to play on a level field. We just can’t offer the pay and benefits others do, no room. These “investments” like college tuition etc sound great but we are busy making note payments and paying rent/service fees and shouldering more annual expenses every year.

I don’t recall a mebtion of 2% food cost (as a %of sales) at the gallery walk. We were unprepared for this and it isn’t getting better.

I can’t pay $14/hr with full benefits like the guys mentioned do so we usually get those who others don’t want. Oh, and at business reviews we get to explain why our turnover is so high? Hell, I’m losing 20+yr vets who *were* lifers. They’re tired of unrealistic demands and irrational field service idiots with less experience keeping them on the defensive.

The whole thing is broken. Leadership is running out of people to blame, they fired those who might have helped.

They are obsessed with analytics, their own tell a pretty compelling story.

We will see if the next bunch lives in reality, I predict these guys will soon see the door. Their own obsession will be their undoing.

Anonymous said...

I'm so thankful I got out with any money and just in time. Have close friends still in so I hear all the news and it sucks.

Will it change.. there is always a greedy kiss butt that will take the stores. But in the US Labor Markets we will not stabilize turn-over. We have some wonderful managers and crews in so many stores but 6 day weeks, hard to get a weekend, 10 -12+ hour days... all without room for competitive compensation and help to key Team Members and Managers is sucking the personality and style out of the restaurants.

Good luck McD.. it was a spectacular journey for my wife and I.