McDonald’s CEO Says He Has Turnaround Ideas Up His Sleeve

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Facing sagging sales, increasing criticism of its labor practices, and growing disenfranchisement from its franchisees, McDonald’s recently installed CEO Steve Easterbrook is at the head of a flagging company that was once viewed as an unstoppable fast food force. But Steve-E claims that he’s got some ideas on how to reverse the course before this burger Titanic strikes the iceberg.

“We are developing a turnaround plan to improve our performance and deliver enduring profitable growth,” Easterbrook said in a statement, according to Bloomberg.

Of course, he’s not sharing those plans just yet. We’ll all have to wait until May 4 for that.

McDonald’s same-store sales were down 2.6% in the first quarter, even as the company made a massive media push with its “lovin'” campaign, which briefly allowed random customers to pay with non-currency like hugs. The marketing, which included prominent Super Bowl advertising, increased brand awareness of McDonald’s but failed to improve sales or consumers’ feelings toward the company.

McDonald’s also recently announced pay hikes for employees at company-owned stores in an apparent effort to steer away some of the negative publicity arising from protests and walk-outs from workers demanding higher wages. However, since 90% of U.S. McDonald’s are owned by franchisees who make their own decisions about wage levels, the overwhelming majority of employees are unaffected by this raise.

The fast food giant recently held a Turnaround summit with franchisees, but some said the event was a “farce… The ideas presented — such as Create Your Taste — DO NOT fit our business model. McDonald’s Corp. has panicked and jumped the shark. The problem is an unwieldy menu—too big—and trying to be all things to all people.”

In San Diego, McDonald’s has just begun testing an all-day breakfast menu (no biscuits included). If successful, it might appease disgruntled franchisees who have been complaining about too many high-cost, limited-time menu offerings that don’t pay off. By serving breakfast all day, it could give franchisees additional revenue without having to add anything new to the menu.

One unquestionably positive move made by Easterbrook was to start sourcing meat from chickens raised without controversial antibiotics. This may not have an immediate impact on the company’s sales, but when one of the largest chicken-buying entities in the U.S. demands drug-free birds, it should lead more poultry producers to curb their medically unnecessary use of these antibiotics.

by Chris Morran via Consumerist