From USA Today, 10 things McDonalds need to do:
FIXING McDONALD'S
10 things McDonald's must do to get its house in order
By Bruce Horovitz, USA TODAY
The Golden Arches aren't going away. And poor Ronald McDonald will continue to muster a smile.
McDonald's in Hinsdale, Ill., looks cheery, but the chain has problems.
By Stephen J. Carrera, AP
But with a new CEO on tap, just about everything else at McDonald's (MCD) is on the table. Or, perhaps, soon could be flying off the table.
Experts say that James Cantalupo, who takes over for Jack Greenberg on Jan. 1, better have an appetite for change. Greenberg's tenure was cut short last week following several years of disappointing performance.
The big question remains: What can Cantalupo do to fix McDonald's? The 47-year-old chain, with 30,000 restaurants in 121 countries, appears to have lost its way. Its stock has tumbled. Same-store sales are mostly down. The chain that virtually invented fast food has failed to innovate for years, industry analysts say.
Who'd have imagined three or four decades ago that eating at McDonald's could become for some their fast-food last resort instead of a first choice?
For the moment, it appears that Cantalupo — who declined interview requests — isn't coming in with a recipe in hand to turn around Mickie D's. But the need to reinvent McDonald's seems more crucial than ever. "No one wants to admit to eating at McDonald's," says Alan Hickok, analyst at U.S. Bancorp Piper Jaffrey.
Even worse, the fast-food giant ranked dead last overall in a massive national polling of nearly 50,000 frequent eaters from 70 fast-food chains. Sandelman & Associates, a fast-food consulting firm, did the poll late last year. "It's embarrassing," says Bob Sandelman, who oversaw the survey. "Most consumers have a pretty low perception about food at McDonald's."
Cantalupo's top job will be to fix that. Plenty of folks are only too happy to help him on his upcoming mission to mend McDonald's. USA TODAY talked to experts — including restaurant industry executives, analysts, consultants and, of course, consumers. Here are the Top 10 things they suggest that Cantalupo must do to reinvent McDonald's:
1. Fix the food.
"McDonald's has engineered the soul right out of its food," says Hickok, the analyst. "It's so consistent. So perfect. And so bland."
Hickok, who has four kids from 6 to 14, says one of his best barometers on McDonald's is through his kids. They've all have stopped asking him to go to McDonald's. "They prefer restaurants like Applebee's," he says, "or any place with a really good dessert."
Perhaps even more damaging is the Sandelman fast-food survey, in which consumers ranked McDonald's food near the very bottom in taste, quality and temperature.
Under Cantalupo, look for more outside-the-box new products at McDonald's, such as its wildly successful Grilled Chicken Flatbread Sandwich.
2. Serve it hot.
Although McDonald's spent years developing its new cooking system, consumers continue to complain that the food is not served hot enough. Its staples — burgers and fries — are widely regarded as the fast foods where temperature is especially critical to good taste.
3. Lose the lines.
"The kitchen is broken," says Dick Adams, a consultant to McDonald's franchisees. In order to speed service, he says, the stores must be permitted to make some food ahead of time "so that folks can grab it and go."
4. Clean up the joint.
Besides being convenient and fast, McDonald's national reputation was built on the fact that its stores were always "spotlessly clean," says Dennis Lombardi, senior vice president at Technomic, a fast-food research firm. During the rapid growth of the 1990s, however, that mission fell to pieces, experts say.
With the help of so-called mystery shoppers, McDonald's has recently begun keeping better track of its stores and is trying to put on a better face.
5. Don't ignore grown-ups.
Flight attendant Phil Perry doesn't like to admit it, but he eats at McDonald's 20 to 25 times a month.
But only because he has to. His morning flights typically leave so early from Philadelphia that nothing else that's fast and convenient is open.
"It seems as if all of their breakfast items are either fattening or sugary," Perry says. "They need to clean up their act and offer some healthy alternatives."
McDonald's should find a way to make sure that even adults "feel good" about eating there, he says.
6. Get relevant.
The folks who were reared on Happy Meals some 25 years ago don't think McDonald's "does it for them" any more, says Peter Oakes, analyst at Merrill Lynch.
"The days of people beating a path to McDonald's door to eat with plastic utensils on immovable furniture are over," Oakes says. Something as simple as piping classic rock music into McDonald's could improve the ambience.
7. Grow smarter.
McDonald's widely publicized move into new restaurant ventures has mostly been a bust. Only its investment in Chipotle Mexican Grille remains a clear success.
Growing the Donatos Pizzeria chain has been more difficult than executives anticipated. Boston Market is making money, but not much. Pret A Manger's growth has mostly been limited to New York City. Earlier this year, the company quietly sold its unsuccessful Aroma Cafe business in the United Kingdom.
"Their new acquisitions have been lackluster," says Irma Zandl, president of the Zandl Group, a youth market research firm.
8. Let R&D's hair down.
"The name of the game is new products," says Gene Galgliardi, a product development specialist who helped create Popcorn Chicken for KFC.
There was a time when research and development was McDonald's hallmark. With encouragement from management decades ago, regional franchisees developed product hits like Egg McMuffins and Big Macs. But R&D at McDonald's has since evolved into a massive bureaucracy, critics say.
Galgliardi recalls the brushoff he recently received when he tried to get McDonald's executives to consider his proposal for a steak sandwich. Two R&D executives dismissed it outright. Consumer testing — not just executive opinion — should play a bigger role in product development at McDonald's, he says.
9. Fix the ads.
For decades, McDonald's was almost as widely recognized for its advertising as for its food. In fact, some say the image created by the chain's early ad campaigns — "You deserve a break today" — helped establish the image of McDonald's as a place that is clean, wholesome and special.
Its current slogan, "We love to see you smile," has little direct connection to the food, Hickok complains. It is rare, he says, for a fast-food campaign to be successful when it doesn't focus on the food.
10. Melt the cheese.
Then there are the basics. The things McDonald's used to be so very good at, like serving gooey burgers and hot french fries.
Under the new cooking system, cheese is slapped on the burgers at a temperature that's often not even hot enough to melt it. Both consumers and franchisees have complained about that, Adams says. "There's got to be a way to melt the cheese."
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