McDonald's CEO steps down as sales decline

NEW YORK — McDonald’s CEO Don Thompson is stepping down as the world’s biggest hamburger chain fights to hold onto customers and transform its image.

The company said Thompson, who has been CEO for two-and-a-half years, will be replaced by Chief Brand Officer Steve Easterbrook. Previously, Easterbrook has led efforts related to marketing and menus and served as president of McDonald’s Europe.

McDonald’s Corp., which has more than 35,000 locations around the world, has been struggling amid intensifying competition and changing attitudes about food. Earlier this month, the company reported falling earnings and sales and said it making major changes this year bring back customers and save money. It said it would slow down new restaurant openings in some markets. It’s also making menu changes.

Thompson will leave March 1 after nearly 25 years with the company.

Among the challenges Easterbrook will inherit as the chief executive: the image that fast-food is junk food; the growing number of places like convenience stores selling cheap, ready-to-eat food and the surging popularity of places like Chipotle that position themselves as being of higher quality.

McDonald’s says it’s already working to address such issues, including a campaign designed to dispel common myths about its food. To address the popularity of more premium, customized burgers, it also plans to roll out an option that lets customers build their own burgers by tapping a touchscreen.

In after-hours trading, shares of McDonald’s jumped 3 percent to $91.55. The stock has declined about 6 percent in the past year while broader markets are up in the double digits.

source: business.inquirer.net

The slow decline of fast food in America

NEW YORK, United States–The hospitals of the Truman Medical Centers in Kansas City, Missouri no longer serve fast food in their cafeterias, after ending a contract with McDonald’s in 2012 — two years ahead of schedule.

In Kentucky, Kosair Children’s Hospital signed up to serve Big Macs and Chicken McNuggets to its patients when it opened in 1986. But it has now followed in TMC’s footsteps.

The reversals by hospital chains that once embraced McDonald’s reflect a waning love affair with fast food in the United States, as consumers become increasingly aware of the benefits of eating better.

“Fast foods have their place, but I am not so sure their place is inside the hospital,” recalled John Bluford, the former TMC chief executive.

“We thought that we needed to change the game a little bit and start creating a culture of health,” Bluford told AFP.

“It was a health-concerned decision and a mission-driven decision, given our mission to improve the health of our community.”

Shifting tastes 

Sales of McDonald’s in the United States fell 3.3 percent in the last quarter. The consumption of sodas fell last year to 1995 levels, according to the industry specialist Beverage Digest.

Americans drank on the average 51 gallons (nearly 200 liters) of soda per person in 1998; last year, it was 44 gallons.

The fall is more marked for light sodas, which fell six percent amid concerns sparked by studies suggesting some synthetic sweeteners were carcinogenic.

“There’s a shift away from the perception of food that is mass-produced towards food that is perceived to be more homemade or artisanal or sustainably produced,” said Keith-Thomas Ayoob, associate clinical professor at Albert Einstein College of Medicine in New York.

“Consumers want to feel that they’re doing healthier things and eating a healthier diet.”

More and more Americans are making the link between fast food and sodas, and life-long health problems like obesity and diabetes, said Sriram Madhusoodanan, an organizer of the anti-fast-food campaign “Value [the] Meal” at Corporate Accountability International.

Campaigns like theirs are scoring gains against the powerful industry.

In December 2011, San Francisco required fast food chains to add more low-sugar, low-salt foods like fruit and vegetables for children.

And those campaigns are also showing results.

The US Centers for Disease Control said in February that there had been a 43 percent fall in obesity among two- to five-year-olds over the previous decade.

Much more needs to be done, according to the organization Trust for America’s Health. More than two-thirds of adult Americans remain overweight, it says.

Christopher Gindlesperger, spokesman for the American Beverage Association, downplayed the role sodas play in the health problem.

Because of the greater popularity of low-sugar sodas, he said, the amount of sugar consumed from sodas has fallen 40 percent in the last 10 years.

Sugar-related diseases “are very serious and very complex,” he said.

“If you look at the government data, you see that calories in the American diet from sodas are just a small piece of the overall (total)… We empower our customers to make the choices that are right for them.”

New options

The success of the restaurant chain Chipotle Mexican Grill symbolizes the new face of the American diet.

Launched in 1993, Chipotle advertises that it uses hormone-free meat and locally-raised organic vegetables.

“From the very beginning, Chipotle has used really high-quality fresh ingredients, and prepares all the foods we serve,” company spokesman Chris Arnold told Agence France-Presse (AFP).

“So from the beginning, we were doing something which is pretty different than what was happening in traditional American fast food.”

Fast food chains are reacting to the new social and market pressure. McDonald’s has eliminated some of its controls on franchises to allow them to adapt menus to customers’ tastes.

Last year, Taco Bell phased out its children’s menu. And drink companies like Coca-Cola and Pepsi are expanding their beverage lines with lower-sugar options.

McDonald’s, Coca-Cola and Pepsi did not respond to requests for comment from AFP.

For Madhusoodanan, the real change will come when McDonald’s stops tempting children with toys to sell its “Happy Meals”.

“They are changing, they’re coming around because the public is now demanding it. They have to change,” said Bluford.

source: lifestyle.inquirer.net

Russia closes 12 McDonald’s branches, inspects 100

MOSCOW – Russia has temporarily closed 12 branches of McDonald’s on health grounds and is carrying out more than 100 inspections, the US fast food chain said Friday.

Russia has cracked down on McDonald’s this month, closing three other branches of the hugely popular burger chain over alleged hygiene violations in a move widely seen as a retaliation against Western sanctions over Ukraine.

McDonald’s said in a statement that 12 restaurants have now been closed by the authorities, seven of them in southern Russia, and “currently more than 100 inspections are being carried out”.

The company said it is looking at the alleged violations to work out how to reopen the restaurants as soon as possible.

Courts on Wednesday ordered three branches closed for the maximum period of three months on health grounds, including two in central Moscow, in decisions that McDonald’s said it would appeal.

In the latest development, a spokesman for Russia’s food safety agency in the central Yaroslav region, cited by the RIA-Novosti news agency, said that E. coli, some strains of which can cause serious food poisoning, had been found in iceberg lettuce in one restaurant.

McDonald’s has over 400 restaurants in Russia with more than 37,000 employees. It opened the first in central Moscow during the late Soviet era, attracting giant queues of customers eager to try US fast food for the first time.

While ostensibly for health reasons, the move against McDonald’s came close on the heels of the West ratcheting up sanctions on Moscow for its role in the Ukraine crisis — and Russia banning most US and EU food imports in retaliation.

Russia has a long history of using sudden food safety concerns as a political weapon against unfriendly states.

While McDonald’s is a symbol of American culture, the company has made huge efforts to build up its local supply chain and says it buys 85 percent of the food it serves in Russia inside the country.

source: newsinfo.inquirer.net