On July 23, 2015 the McDonald’s announced more bad news for the company and for investors reporting a “10% drop in quarterly sales and earnings per share” according to CNN Money.
McDonald’s CEO Steve Easterbrook reacted to the news by announcing plans for the company to revamp their menu items including breakfast, “[b]ut Easterbrook said the company is still trying to figure out if all-day breakfast will make economic sense and help simplify the company’s menu.
Franchisee consultant Richards Adams said, “They are going in a bunch of different directions and trying to be all things to all people. That’s been their problem for the last five or six years” (Business Insider, Lutz A., September 21, 2015).
The negative sales trend continued until just recently their “sales at U.S. restaurants open at least 13 months rose 0.9% in the third quarter—beating analysts’ projection for a 0.2% decline and marking the first quarterly increase in that key measure in two years” according to The Wall Street Journal (Jargon, October 22, 2015).
“Nomura Securities analyst Mark Kalinowski found that they typically expect all-day breakfast could boost same-store sales growth in the fourth quarter by 1.5 percentage points and by 1 percentage point over the next 12 months.”
Things are potentially hopeful for McDonald’s, and so far the breakfast menu policy appears to benefit sales. With stability and positive financial outlook investors and public perception of the company should improve.
If I was the Public Relations professional for this corporation, I would seriously consider different policies than Easterbrook. I believe, like franchisee consultant Richard Adams that “they are going a bunch of different directions and trying to be all things to all people.”
While it is good and important for corporations to have community relations and “give back to society,” a prudent choice for McDonald’s would be to maintain as much efficiency as possible in their unique position as it is an organization driven by the classical hierarchical theory, and the main expectation society has upon McDonald’s is to produce quick, reliable, appetizing, and cheap food. If those basic values are lost from the organization as a result of implementing too many new things, the reaction from the public is unpredictable, and there is a greater risk for the company to lose the people’s trust and support while some groups may like new changes.
People expect McDonald’s to stay cheap, and the investor’s public wants them to continue an increase in sales. I believe the breakfast all day policy was a good choice that will continue to benefit the company and its relations with the public that wants a few more tasty choices, but I recommend making prudent implementations that maintain low prices, happy people, and fast food.