How Did McDonald’s Recover?
After Morgan Spurlock of Supersize Me fame came out with his documentary on McDonalds and its health effects, McDonalds made a commitment to corporate recovery and they revamped their menu to be more health conscious. Is Morgan to thank for the company’s recovery?
Just three and a half years ago, McDonald’s was struggling mightily. Its stock had tumbled 56 percent in 10 months and the company had reported its first quarterly loss. Sales at existing stores in the United States, by far McDonald s biggest market, were not growing and in many instances were declining.
Stung by obesity lawsuits and criticism from books like Fast Food Nation, the company’s brand seemed passe and the high-calorie, high-fat, high-sodium cuisine appeared poised for a long decline.
But that did not happen. Today, McDonald’s business, both in the United States and globally, is growing; the chain gets some one million more American visitors a day than it did just a year ago.
Since 2003, according to the NY Times, revenue for McDonald s has increased by 33 percent and its shares have rocketed 170 percent. The burger chain has, you might say, been supersized.
But I have a different take on the turnaround. Spurlock may have been the impetus and final nail in McDonald’s healthy food, but since that movie, McDonalds did away with anything Supersize.
I happen to love the fountain soda at McDonalds, and its pretty quick to hit a drive thru and get a jumbo soda. But you can’t even get that anymore.
But you can at the competition!
What McDonald’s did was literally make lemonade from lemons. They stopped giving away 33 percent more product for free. And the competition didnt. McDonalds led the way with new innovative menu items such as the McGriddle, and now BurgerKing is introducing a similar product. This has allowed McDonalds to conserve cash and expand the business.
Spurlock would love to take the credit, but I say its great management at the company that brought about the change.
