Business

McDonald’s Is Everywhere, But It Doesn’t Stand For Anything

A logo of McDonald's is seen at its restaurant in Tokyo, Wednesday, Dec. 17, 2014.  McDonald's in Japan has begun limiting the serving size of fries as stocks of spuds run short due to labor disruptions on the U.S. West Coast. (AP Photo/Eugene Hoshiko)
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(Bloomberg) – McDonald’s practically invented the concept of fast food. It promised meals that were inexpensive and convenient, that could be eaten on the go and even with one hand while driving. The food wasn’t necessarily healthy, but it didn’t need to be — it appealed to Americans’ appreciation for consistency, and took advantage of a thriving car culture. Now, nearly 70 years after the chain was founded, people everywhere — and Americans in particular — have higher expectations about quality and taste. Our aspirations have evolved. That doesn’t mean Americans don’t want food that’s inexpensive and convenient anymore, it’s that more of them don’t want it from McDonald’s.

This is part of the “customer relevance” problem that led to CEO Don Thompson’s resignation. The Golden Arches has sheer size going for it with more than 36,000 locations, but there are now too many other choices that offer better quality, prices, or sometimes just a better atmosphere. “When it comes down to it, McDonald’s has strong competitors for each of the foods they offer,” said Darren Tristano, executive vice president of Technomic, a research firm. We can get better burgers (and fries) at Five Guys, better chicken at Chick-fil-A, better coffee at Starbucks, better shakes at Shake Shack. Chipotle uses higher quality ingredients. Panera makes its own bread. Starbucks has comfortable chairs. If we want to try something new, we can have a premium pretzel burger at Wendy’s or a waffle taco at Taco Bell.

By broadening beyond their core menu of burgers and fries, McDonald’s “opened themselves up to competitors that challenge the quality,” said Tristano. McDonald’s may be everywhere, but it no longer stands for anything in particular. “You can’t be all things,” said Bonnie Riggs, a restaurant analyst at NPD.

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