Last ditch effort actually causing stores to lose more money, customers
October 16, 2015
An ill-thought scheme intended to retain the last of McDonald’s’ customers has blown up in franchise owners’ faces, showing how little can be done to save the fast food giant from imminent collapse.
After seven straight quarters of declining sales, McDonald’s decided to implement an all day breakfast menu earlier this month in hopes to revive their bottom line.
The president of the company’s US division called the launch a “success,” but that statement is at odds with franchise owners’ sentiments, one of whom says the new policy is driving customers away “in droves.”
In a survey conducted by Nomura, franchise owners revealed how the launch of all-day breakfast is costing their businesses money and time, and is overall a disaster.
“In small stores, the problems are vast with people falling over each other and equipment jammed in everywhere,” one franchise owner said, according to Business Insider.
Another franchisee called the gimmick “a non-starter” and said it’s causing his or her store to lose money, as cheaper foods on the breakfast menu produce lower average ticket costs.
“We are trading customers down from regular menu to lower-priced breakfast items. Not generating new traffic,” they said.
Yet another owner described the sudden change as an “erratic, distorted, disorganized direction from McDonald’s,” while another revealed that “Customers are abandoning us in droves because we are either too slow, or sub-par quality.”
“Unfortunately, with the current labor pool in our area, we are struggling to have enough people to run the shift, much less add an extra person,” another franchise owner wrote.
One franchise operator also expressed McDonald’s is in the “throes of a deep depression,” and another added the restaurant could be “facing its final days.”
“The CEO is sowing the seeds of our demise,” the franchise owner wrote. “We are a quick-serve fast-food restaurant, not a fast casual like Five Guys or Chipotle. The system may be facing its final days.”
The company did not respond to Business Insider’s request for comment.
The massive fail of 24-hour breakfast is just the latest indication of McDonald’s demise after numerous attempts by the company to bring it back into the public’s favor.
In May, the company announced they would no longer report monthly same-store sales, instead switching to quarterly data following “11 straight months of declining global comparable-store sales,” according toBloomberg Business.
That followed the closure of 350 stores by April of this year, and an announcement that they would close an additional 350 by 2016.
Some analysts attribute the company’s decline to consumers who are growing more conscious of unhealthy food choices and rejecting the industry altogether in favor of gmo-free, healthier fresh foods.
“McDonald’s is a huge company, a huge supply chain spread everywhere, and it’s kind of getting nibbled at the margins by all these upscale burger chains, organic places [and] locally sourced food,” Yahoo finance columnist Rick Newman wrote in April.
This article was posted: Friday, October 16, 2015 at 3:46 pm
McDonald’s on Last Leg as ‘All Day Breakfast’ Gimmick Implodes
Fri, 16 Oct 2015 20:46:53 GMT