McDonald’s Re-brands to Join the Burger Revolution

Baby Boomers may be the top spenders today, but Millennials are expected to spend more than $200 billion annually in 2017 and $10 trillion in their lifetimes. As the generation’s purchasing power grows, the restaurant industry has embraced a variety of changes to attract this influential cohort, including making improvements to branding and food quality standards. And McDonald’s, still the top seller among quick-service restaurants (QSRs), is taking notice and joining the food revolution.

McDonald’s has built a fast-food empire selling quick, convenient cheap food, including the iconic Big Mac. However, six consecutive quarters of declining sales and a loss in market share has the fast food powerhouse reimaging itself into a more modern burger joint.

“Where we need to fix the fundamentals, we need to act — now,” said CEO Steve Easterbrook during an April call with investors. “I’m not looking for incremental steps.”

So how will McDonald’s rebrand itself without losing its roots? The company is taking a number of steps to
transform and rebrand its offerings to be more appealing to millennial customers, while also working to avoid alienating a customer core that has been loyal to the brand for more than 60 years.

Building a better menu – McDonald’s Golden Arches have not necessarily been synonymous with healthy eating. However, the company is currently rolling out bigger, meatier burgers as well as researching ways to improve quality, taste and healthfulness throughout its menu. In order to meet shifting consumer demands, McDonalds is limiting the use of most antibiotics from its chicken, in addition to testing an all-day breakfast menu. The brand is also making an effort to strategically re-engineer its menu to local markets to cater to unique regional preferences. However, it’s worth noting that in order to be successful, McDonald’s should ensure that these changes are transparent to the public.

Building a better team – McDonald’s has also taken steps to improve its image as an employer by increasing wages and adding benefits for some employees. The Company streamlined and revamped its corporate team to bring different ideas to revitalize sales and improve operations. Since his appointment in March, CEO Steve Easterbrook has not only taken the helm of the fast food giant’s rebranding efforts, but has worked to steer the company away from negative perceptions around its labor practices.

Building a better franchisee – The Company has also done some important reshuffling in order to improve its relationship with its franchisees, including hiring Karen King out of retirement to become Chief People Officer (now Chief Field Officer) to help stabilize the company’s U.S. operations and franchises. Furthermore, Easterbrook announced in April that the company would eliminate approximately 700 underperforming chains worldwide, including both franchise and company-owned stores, making this the first year since at least 1970 that the company will close more stores than it opens. Though the company remains confident that it has room to expand, this move could be a way of strengthening its base and “pruning the tree,” according to a former chief communications officer.

During its long tenure as one the largest QSR franchises worldwide, this isn’t the first time McDonald‘s has weathered shifting tides and reinvented itself to keep up with consumer demands. Success for any restaurant includes listening and reacting to customer needs and adjusting to market trends, without losing or changing the brand’s core.

Want to learn more about restaurant rebranding efforts? Contact Giselle El Biri at gelbiri@bdo.com, and keep up with the Practice’s latest thoughts by following us on Twitter at @BDORestaurant.

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