McDonald’s vows to right sales with flatter management, more localization

McDonald’s said it would quickly adjust direction under new USA president Mike Andres to snap the traffic decline that led to this morning’s announcement of a 3.3-percent decline in comparable store sales.

The prior approach just didn’t work, leading to a 10-percent decline in operating income, the company acknowledged.

Andres’ has three objectives, McDonald’s noted in releasing financial results for the third quarter:

  • Trim layers of management to bring the decision-making process closer to the field and hasten the process.
  • Craft a national marketing message that focuses on food quality and reassures the public that McDonald’s sources and prepares its products in a responsible manner. The message will also stress McDonald’s sense of responsibility in dealing with people, and will be complemented by highly localized supplemental campaigns.
  • Simplifying the menu to showcase core products and items that are locally popular, with a simultaneous emphasis on customization.

But the company voiced doubts that the new strategy would yield immediate results.

"We began 2014 mindful of the challenges we faced in driving sales and profitability,” said CEO Don Thompson. “The internal factors and external headwinds have proven more formidable than expected and will continue into the fourth quarter, with global comparable sales for October expected to be negative.” 

He cited a “sense of urgency” on the part of headquarters to employ the new strategy.


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