The McDonald's brand is almost as universal as Coke. The group's 38,000th restaurant opened in 2019, and those golden arches now spread across 120 countries, welcoming some 70m customers every day. Not enough, the company still says. On any day McDonald's still only serves less than 1% of the world population, leaving plenty of room for growth. However profits fell dramatically in 2002 and the group took unprecedented steps to close under-performing outlets, even pulling out of a few markets altogether. That move appeared to have paid off by 2004, and McDonald's reported strong growth for much of the following decade, even in the face of an economic downturn. A key factor was the broadening of the menu with an enhanced range of breakfast items, healthier chicken and salad meals and premium beverages. The company also pushed aggressively into the coffee shop sector in several key international markets as well as the US with its McCafé brand. However the reviving US economy brought fresh challenges from 2013 onwards. Domestic sales suddenly stalled, despite a frenetic burst of menu innovation, as customers moved away to less established rivals, while international performance was dented by a variety of different challenges in regional markets. Even after several changes of both management and strategy those troubles have yet to be fully resolved. The biggest problem seems to be securing consistent growth in the company's key market, the US. There were signs that the group was finally on the right track by 2018 as a result of new innovations such as all-day breakfast and other menu adjustments, in-store digital order kiosks, home deliveries and other such introductions. At the same time, the chain has set about reducing the number of company-owned outlets in favour of franchised stores. By the end of 2018, only around 2,700 of the chain's 37,850 outlets were directly owned. As a result company revenues have steadily declined - to $21.0bn in 2018 - even as profits and systemwide sales have grown. The former hit a record $5.9bn in 2018, while the latter topped $96bn, up 6% year on year. The US alone accounted for more than a third of system sales, or $38.5bn in 2018. Steve Easterbrook is group CEO.
Capsule checked 26th September 2019
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Historical profile information for McDonald's
Adbrands Daily Update 10th Dec 2019: McDonald's completed a reshuffle of top executives in the wake of Steve Easterbrook's shock ousting last month. Ian Borden was named as president of all international markets. He had previously led international licensed markets, where the McDonald's business is managed by local franchisees. Joe Erlinger had been president of international operated markets, where the group retains a direct local presence. Borden now combines both roles following Erlinger's promotion last month to president, USA.
Adbrands Daily Update 4th Nov 2019: McDonald's staff and investors were in shock after the abrupt dismissal of CEO Steve Easterbrook over the weekend. The British-born executive has been involved in a consensual relationship with a female colleague, in breach of the fast feeder's code of conduct. McDonald's forbids employees from having personal relationships with colleagues who report to them either directly or indirectly. "This was a mistake," Easterbrook admitted in an all-staff email. "Given the values of the company, I agree with the board that it is time for me to move on." He is replaced with immediate effect by Chris Kempczinski, president of McDonald's USA. Joe Erlinger steps up into Kempczinski's former role. As CEO since 2015, Easterbrook has overseen a gradual return to form at the global restaurant giant, though there have been some wobbles this year as a result of growing friction with franchisees, who now operate the vast majority of outlets. Separately, McDonald's said that its most senior human resources executive David Fairhurst has also left the company with immediate effect.
Adbrands Daily Update 21st Oct 2019: "Childhood is Inside". Here's another effortlessly charming film from TBWA Paris for McDonald's. Though we always enjoy their animated Happy Meal spots (which are clearly designed to appeal to kids) this elegantly wistful new film - for parents this time - is even better. Bold too to make an ad that's not even really about the product but about what its emblematic box signifies for kids: a happy place to store important memories. In that sense, it's a companion piece to those US-made Folger's coffee ads that were not about the coffee itself but about the similarly iconic tins that many families used as repositories for household oddments. TBWA Paris take that idea as a starting point and re-spin it as a distinctively French, nostalgia-rich ode to childhood summers. Lovely. Fabulous choice of music too.
Adbrands Daily Update 16th Sep 2019: In a sizeable blow to Omnicom, McDonald's named Wieden & Kennedy NY as lead creative agency in the US, supplanting We Are Unlimited, the dedicated agency created specially for the fast feeder within DDB. The latter will continue to handle some assignments, but the bulk of the business moves to W&K. It's a big change for McDonald's which has traditionally consolidated all global marketing within Omnicom's DDB or TBWA networks or Publicis Groupe's Leo Burnett.
Adbrands Daily Update 28th Aug 2019: "Egg McMuffin: Director's Cut". You're unlikely ever to see another McDonald's ad quite as beautiful as this. TBWA Paris commissioned 3D animator Matthieu Braccini to conjure up a fantastical vision of the creation of a simple Egg McMuffin sandwich for a series of online GIFs. Here's Braccini's "director's cut", compiling all the sequences as a single film. The results are like a food-based fever dream of divine perfection, in which all the elements of the sandwich are constructed by a series of bizarre Rube Goldberg / Heath Robinson machines. It could probably be marketed as some form of meditation tool, to be watched for hours on end on permanent loop. Delicious and delightful.
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