Friday, April 24, 2015

McDonald's Closes Hundreds of Stores as Worldwide Sales Continue to Plummet

McDonald's Japan

 matter how "artisanal" McDonald’s new grilled chicken breast may be, the quick-serve juggernaut can’t seem to escape the legacy of plastic-filled McNuggets and pay-for-play-seeming myth-busting videos that mar its past.
Because of an ongoing two-year sales slump, McDonald’s has closed down more than 350 stores worldwide since the beginning of 2015. The company cites increased competition as the driving force.
“As the world’s leading restaurant company, we are evolving to be more responsive to today’s customer,” CEO Steve Easterbrook said in a statement. “McDonald’s management team is keenly focused on acting more quickly to better address today’s consumer needs, expectations and the competitive marketplace.”
Though an unprecedented level of global burger competition is surely part of the problem, McDonald’s has also faced several crushing food safety and labor scandals over the past year, especially in its international locations.
In Japan, which is McDonald’s second-biggest market after the U.S., same-store sales fell 39 percent in January, causing 130 store closures in the following months. It appears that consumer trust was never restored after more than 1 million McNuggets were recalled in January because multiple customers found plastic in their chicken bits. The plastic scandal came just six months after health officials found that thousands of cases from a Chinese chicken-processing plant had expired before being shipped to Japanese McDonald’s locations. 
American first-quarter sales have fallen 2.3 percent in 2015 compared with the previous year, which has McDonald’s execs scrambling for a way to reclaim customers that have defected for healthier options such as Chipotle and Panera. Easterbrook, who was appointed CEO in March after his commendable work revamping McDonald’s U.K.'s menu to include fresher produce and organic milk, has already made significant strides in improving American offerings.
In early March, McDonald’s announced that it would stop sourcing chickens that had been treated with human antibiotics. In April, the company reduced the amount of ingredients in its signature grilled chicken breast by almost half.
The company is portraying the mass shuttering as a sort of managed fire—a way to clear the dead brush so a healthier ecosystem can spring up in its place. But it seems to be more indicative of an industry-wide problem: People just aren’t eating burgers like they used to. 

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