top of page
  • Robert Farago

McDonald's is Doomed

Even as it adds 9k new stores to the chain

If you think “casual dining” was better before fast food colonized the country, think again. Americans played Russian roulette with their bowels. Lousy service, unpredictable prices and bacterial breeding grounds masquerading as “rest rooms” – budget food was no fun.

Thank McDonald’s for reinventing and elevating wallet-friendly restaurants. An odyssey that started in 1940, when Maurice and Richard McDonald opened a San Bernardino, California drive-in, roller skating girls and all.

Dick was the money man. One day, he approached Maurice (immortalized as Big Mac) with an interesting analysis: hamburgers accounted for the vast majority of their sales and profit.

Why not just sell hamburgers, like the 20-year-old White Castle chain with their five-cent “sliders”? McDonald’s hamburgers-only Speedee Service System was born.

Focusing on speed, adding value, quality and cleanliness, McDonald’s was a roaring success.

After franchisee Ray Kroc muscled the boys out of the biz, the former paper cup salesman created the vast real estate/food chain empire that is today’s McDonald’s.

The company now serves 69 million customers per day in over 100 countries at more than 40,000 outlets.

Along the way, McDonald’s became hybrid Drive-thru restaurants. Then urban, airport and gas station outlets. More importantly, Mickey D’s menu morphed from one item to dozens, with multiple variations (e.g., shake flavors and combo meals).

McDonald’s America now sells 145 menu items – not including seasonal specials and new toys – in various combinations. There are over a billion ordering possibilities.

The struggle to quickly fill an endless succession of unique orders accounts for “park here while we complete you order” spaces and declining food quality.

Some of McDonald’s competitors are guilty of the same menu bloat and lowered quality (e.g., Burger King). Some aren’t. Smaller chains (e.g., Five Guys) provide superior service and better burgers by using the McDonald Boyz’ original limited menu formula.

McDonald’s still has the edge on price and location. It’s responding to the speed and quality challenge with AI-enabled automation and a worldwide food improvement program (e.g., a hotter sear and melted cheese). Meanwhile, it’s damn the better burgers, full speed ahead.

McDonald’s plans to add 9000 new restaurants by 2025, mostly in The Land of the Free. Not including the possible expansion of CosMc’s, “a new small-format, beverage-led concept.”

McDonald’s is run by Chris Kempczinski. The Harvard MBA grad cut his teeth at Proctor & Gamble (soup division), Kraft and, like Apple’s failed Prez John Sculley, Pepsi.

Kempczinski was in charge of Pepsi-Cola's rapidly expanding non-carbonated division – even as the cola giant’s market share continued its inexorable decline (every year since 2008).

Kempczinski’s brought the same spirit of grow-or-die and product innovation to McDonald’s – the last place that needs either. Shareholders will beg to differ, but disaffected customers won’t.

Truth be told, the once burger-only brand is dead to millions of formerly satisfied customers. The fast food chain that changed America has lost its founders’ commitment to speed, quality, value and cleanliness. Friendliness too.

Hands up: asserting that McDonald’s is doomed errs on the side of hyperbolic click bait. But then everyone thought the Roman Empire was forever. All its outposts have left is pizza and spaghetti. Wait. Don’t get me started on Olive Garden…

0 views0 comments


bottom of page