McDonald's: Specialty markets 'not a top priority'
March 12, 2014
by Eric Schroeder
NEW YORK — Entering specialty markets doesn’t rank high on the list of priorities for McDonald’s Corp. as it looks to strengthen its core business to drive customer visits in the United States, said Pete Bensen, executive vice-president and chief financial officer.
“As we focus more on consumer feedback and demand and look at size of the market, it really becomes an allocation of resources,” Mr. Bensen told analysts gathered in New York on March 11 for the Bank of America Merrill Lynch Consumer and Retail Conference. “What is the consumer telling us they want most? And while we’re doing things within our restaurants to look at things like that — allergens and gluten, etc. — it’s not a top priority right now in terms of product development. But we certainly keep those things on the radar, and as part of our kind of marketing reorganization, keeping those consumer trends and attributes in mind will be something we’ll continue to do.”
Instead, he said McDonald’s has tasked its business insights and consumer insights executives with looking at the types of initiatives it takes to regain sales momentum that prevailed through much of the 2000s.
For the first six months of 2014, the company is focused on a service reset in its U.S. restaurants, Mr. Bensen said.
“Each franchisee and our McOpCo leadership are going to be visited by consultants that are just reminding them of some of the basics around staffing; scheduling; positioning of that staff, which doesn’t sound very dramatic,” he said. “But at the end of the day, those are some of the things that have broken down over the last 18 months as we introduced new products and introduced additional complexity to the restaurant. So resetting that service foundation is a critical piece of this not only in the U.S. but in some of the other markets.
“And especially if you consider we’re putting new kitchen equipment in that … makes the crew more efficient in our current preparation but also can introduce some additional food news with additional toppings and things. So it’s about the service reset.
“It’s a refocus on the core. In each of these kind of case studies that we did internally over the last 10 years, a refocus on the core menu was key to helping drive the turnaround. And that includes new products, and it includes a focus on breakfast.”
In February, U.S. comparable sales decreased 1.4% at McDonald’s amid challenging industry dynamics and severe winter weather. Year-to-date, U.S. sales were down 2.4%, the company said.