Oak Brook, Illinois – McDonalds restaurants are quickly losing customers, and the company’s corporate profits have been steadily sinking. A recent report stated that as many as 700 McDonalds franchise locations would be closing across the US alone. It is believed that one of the largest contributing factors to the declining business at their restaurants is due to the perceived quality of the food that they offer. Documentaries and social media posts have scared some people away from their food, and at this point their burgers and fries appear to be geared towards the taste buds of a toddler. Now that America’s fast food cravings have matured, it may be time for McDonalds to finally do the same.
McDonalds Desperately Needs To Re-Brand Themselves With Upscale Restaurants
McDonalds has tried to attract or retain customers over the past few years by broadening their product offerings, and trying out some new menu items from time to time. Since breakfast has been a big part of the McDonalds’ business, they realized early on that they were losing some of their early morning traffic to coffee shops like Starbucks. They quickly corrected that, and launched the McCafe products in their restaurants with some success. Now the tides are turning once again now that gourmet burgers are becoming a craze in the fast food industry.
Many of McDonalds’ current competitors in the hamburger business are not the Burger Kings and Wendy’s of the world, but the Five Guys and other similar business models. The current competition is no longer interested in the $1 price point, and instead hits consumers at a $5-10 range with great success. There is a place for both in the fast food world, but the low-end market seems to be shrinking. Since McDonalds was virtually over expanded, they must now either choose to retract, or reinvent themselves.
Just like how Starbucks is launching high end locations where more expensive offerings are presented to consumers, perhaps McDonalds could be looking into taking a similar approach. The upscale model would give them the opportunity to re-brand some of the their current retail locations to segment their market share and their consumer preferences. Where you now might see a few McDonalds within a square mile or two of each other, you might see one retain the traditional fast food business model and the other re-launch as a boutique style burger restaurant. This is all subjective at this point, but it has a place.
If you could image a McDonalds without the drive-thru, and with wholesome ingredients that present a fresh and real dining experience to its customers. Lose the indoor play place, spruce up the bathrooms, and make the back kitchen even more visible to the customers. Build the confidence in the consumer that what they are ordering is not only worth the money, but somehow is actually good for them to eat. It wouldn’t be hard for McDonalds to plan out a strategy of using fresh ground hamburger, fresh cut french fries, as well as other alternative menu items.
An uplift like this could bring the boost that McDonalds needs to its portfolio, as well as improve their public image with consumers across the country. America is not the only market where they are currently seeing a decline in profits, and some of the foreign markets may be even less saturated with the upscale burger restaurants that are taking their toll on the current business model. This also opens up the realm of possibility for McDonalds to open locations where their employees may be able to earn those hourly wages closer to the $15 mark, which has been a key topic of labor disputes as of late.
McDonalds Desperately Needs To Re-Brand Themselves With Upscale Restaurants.