It appears that the world is not flocking toward the Golden Arches the way it once did.
McDonald's reported its first-quarter results on Wednesday, and things continue to look not-so-great for the fast food giant. McDonald's reported an 11 percent decrease in revenue and a global sales drop of 2.3 percent due to "negative guest traffic in all major segments," according to a press release.
Perhaps an even greater sign of bad times, McDonald's disclosed that it closed 350 stores in Japan, the United States and China during the first three months of 2015 during a conference call with Wall Street analysts on Wednesday, as reported by Fortune. This is on top of the 350 stores the world's largest restaurant chain had already planned to shutter for the year.
So clearly, McDonald's is in some trouble as of late. In fact, it's been grabbing headlines for the past few months because of its struggling sales.
Because of this, McDonald's has already been trying to turn things around this year with new ad campaigns, menu items and health initiatives. However, McDonald's will begin detailing how it's going to turn its struggling sales around on May 4, according to Fortune.
McDonald's has definitely struggled to keep up with the growth of fast casual restaurants like Chipotle in recent years, not to mention that it has come under fire for the detrimental health effects of its food and how much it pays employees. Still, McDonald's is wealthy and powerful, so we shouldn't count the fast food restaurant chain out just yet. McDonald's should consider making these six changes if it wants to get back on top.
1. Embrace Junk Food And Novelty Items
Practically every day it seems like a fast food chain is coming out with a new monstrosity. Sure, McDonald's has had a few novelty items over the years on the menu (the Shamrock Shake and the McRib, anyone?), but it hasn't really added anything to the menu at the level of the KFC Double Down Dog or the many hybrid foods that appear on Taco Bell's breakfast menu. Since McDonald's already has a reputation for not serving very healthy food, I think it should just own it and go crazy with its menu items. How about a cheeseburger covered in pork belly and nacho cheese sauce? Or french fries with bacon bits, cheese and chili? Or a McFlurry drenched in chocolate sauce, caramel, whipped cream, marshmallows and any other confection you can think of? Dunkin' Donuts and Domino's have both increased their sales by 2.7 percent and 15 percent, respectively, in the first quarter, thanks to new, more indulgent menu items. It could work for McDonald's too.
2. Stay Affordable
McDonald's recently announced that it will be launching the Sirloin Third Pounder, which will set diners back $4.99 and is a lot more expensive than that double cheeseburger you can get on the Dollar Menu. This isn't the first time McDonald's has sold a premium burger. The fast food chain offered a line of Angus Third Pounder burgers that sold for $4.49 each in most markets before discontinuing them after four years on the menu in 2013. McDonald's customers want cheap food, not a fancy, schmancy burger than you can probably get a way tastier version of over at Five Guys for a little bit more money. McDonald's will keep its loyal customer base happy and coming back for more if it keeps its prices low.
3. Put More Focus On Breakfast
Breakfast is one of the areas in which McDonald's is currently doing things right, so this isn't so much a suggestion as it is encouragement for them to keep doing what they're doing. The fast food giant recently began testing all-day breakfast in the San Diego market, which is what McDonald's customers have wanted since breakfast came to the fast food chain. Since U.S. consumers increased their visits to restaurants to get breakfast for the fourth consecutive year in 2014, according to an NPD Group study from March 2014, beefing up its offerings for the first meal of the day could be a major win for McDonald's.
4. Spruce Up The Interior Of The Restaurants
Though McDonald's commercials make the locations of the fast food restaurant look all warm and delightful inside, at least from my experience, they are not like that in real life. The interior of most McDonald's restaurants are cold and outdated. It is a far cry from the big, comfy chairs and melodic light acoustic tunes playing at Starbucks. Maybe if McDonald's actually made its restaurants look more inviting, people would be more likely to go to the restaurant and spend some time there.
5. Pay Employees A Living Wage
In recent months, protests asking McDonald's to increase the minimum wage for employees have placed a dark cloud over the fast food chain. A huge wave of protests asking the fast food chain to increase its minimum employee wage to $15 an hour just took place on April 15. McDonald's announced earlier this month that it plans to raise wages by more than 10 percent for employees at the company-owned U.S. restaurants. However, workers at franchise-operated locations were excluded from this wage hike. Of course, paying employees more is going to deepen the company's costs, but it will also help McDonald's improve its public image, not to mention that improving the lives of its employees could also improve business operations too.
6. Get Some Good Press
— Gigi Hadid (@GiGiHadid) April 19, 2015
Along those lines, McDonald's desperately needs some good press. The health of its products and the alleged treatment of its employees has come under question. Its two new advertising campaigns this year to revitalize its image backfired and didn't do anything to help its image. People don't want to eat food from a place that inspires negative thoughts and feelings. McDonald's needs something, maybe something viral, to put the company back in a positive light. The above Twitter post from It Girl Gigi Hadid is certainly a step in the right direction.