McDonald's CEO 'under siege' at home and abroad

McDonald's Corp CEO Don Thompson sure could use a break.

The head of the world's biggest restaurant chain, who for much of his two years at the helm has been battling to spark sales growth in the United States and Europe, got battered by headline-grabbing bad news in late July.

In the final days of the month, its China business was hit with a food-safety scare involving a key supplier; the chain got ensnared in the West's sanctions standoff with Russia; burger flippers at U.S. restaurants claimed an incremental win from the National Labor Relations Board in their fight to hold McDonald's responsible for the actions of franchisees; and, a Texas jury slapped the company with a $27 million verdict. Add to all that its results showed second-quarter profit dropped more than expected.

"They're under siege on three continents," said Howard Penney, restaurant analyst at Hedgeye Risk Management, an investment research firm.

To be sure, the company's famous name and the ubiquity of its restaurants worldwide help to fuel the media storm, said Penney: "McDonald's is a pawn in many instances around the world. It's an easy target."

Such upheavals are not uncommon for McDonald's and other global power houses, including Coca-Cola Co and Wal-Mart Stores Inc, experts said, though perhaps not quite so many in such a short period.

In a statement a McDonald's spokeswoman said: "In the last few weeks, we've seen issues in various parts of the world which directly or indirectly affect our brand and others. We have 35,000 McDonald's restaurants in 120 countries, and skilled professional communications teams in every area of the world."

She said that dealing with a 24/7 news cycle around the world is par for the course, and the communications teams address such issues so that the company can keep its focus on serving customers.

Thompson was not made available for comment.

Read the Full Article


More from our partners