The Most Noticeable Changes for McDonald's Customers Under Turnaround Plan
McDonald's CEO Steve Easterbrook announced a turnaround plan amid sagging sales.
-- Among McDonald's CEO Steve Easterbrook's global turnaround plans for the world's biggest burger chain, there are only a few changes that may be obvious to consumers, according to some analysts.
Trying to revive sagging sales for the fast food chain, Easterbrook, CEO since March 1, announced a company restructuring during the annual shareholder meeting. In a 23-minute video released online today, he said the company will try to "execute fewer things better," and, "It's customers who decide whether we succeed."
RJ Hottovy, senior restaurants analyst with Morningstar, said the market is looking eagerly for changes that will affect consumers directly. But he said that was the part of the presentation "that seemed most lacking." The other changes include increasing McDonald's global franchised percentage to 90 percent from 81 percent, in essence decreasing the number of company-owned restaurants and increasing the number of owner-operated stores.
Here are three changes that will be most obvious to McDonald's customers, according to Hottovy.
1. McDonald's Your Way
First, customers may see more customized options. McDonald's has tested Create Your Taste system in the U.S. for the past few months after rolling it out in Australia. Easterbrook announced today that a national advertising campaign for it in Australia will launch July. Similar to the customized ordering at Chipotle and Five Guys, customers can pay a bit more to get a burger the way they want it. The company is also testing in California a modified version in smaller and drive-thru locations called TasteCrafted.
2. Delivery
Yes, McDonald's customers can order delivery through the crowd-sourcing direct-to-consumer service Postmates. McDonald's full menu, except ice cream cones, will be available during normal operating hours at 88 participating restaurants in New York City, including Manhattan, Queens and Brooklyn. Just last month, Chipotle also announced it was partnering with Postmates, which charges a delivery and service fee to customers, in addition to giving customers the option of paying a tip. Starbucks will partner with Postmates later this year.
"Everything we heard is [McDonald's] catching up with competitors," Hottovy said, adding that the other organizational changes were "sensible and practical but nothing jumped out at me."
3. New Menu Items
Easterbrook said the company needed a "recommitment to hot, fresh food." Among the menu items will be an "artisan" grilled chicken sandwich and a new sirloin burger in June.
The market's reaction shows the announcement of cutting costs and reorganizing the company and its leadership was "underwhelming," Hottovy said.
"McDonald’s hasn’t been thought of as a leader on the menu side for some time -- by better connecting what consumers are looking for," Hottovy said.
Becca Hary, spokeswoman for McDonald's, said customers have already seen some changes, such as a "greater commitment to food quality in the U.S.," including the announcement last month that it was working to eliminate antibiotics in chicken.
"It’s important to know that these are the initial steps in the turnaround plan that Steve unveiled today," Hary told ABC News. "Our turnaround won’t happen overnight, but we know our performance will be measured through the eyes of the customer."