McDonald's survey results
The results reveal that McDonald's problems are deep and
pervasive and will not be easy to fix. But they also show that the
chain retains appeal for pockets of loyalists, continues to draw
far more customers than its rivals and remains deeply embedded in
the everyday lives of many Americans. They also offer a bit of a
silver lining: Data show the company appears to be on the right
track with some of its recent initiatives, particularly its plan to
introduce all-day breakfast nationwide as soon as this year and its
decision to remove most antibiotics from its chicken products by
2017.
"Competitors have leaped ahead not just in food healthfulness,
quality and tastiness, but also in the overall experience of
ordering and dining," said Mr. Shapiro, the principal investigator.
Nonetheless, he concludes, "Is McDonald's fixable? Yes. Is the fix
in? It doesn't look that way yet."
Put simply, McDonald's is not meeting customers' expectations.
Among the survey's key findings:
-- On a scale of 1 to 9, where 9 means "enjoyed it very much"
and 1 means "did not enjoy it at all," 63.8% of respondents rate
their last McDonald's visit as a 7 or higher. That's far below
79.8% of customers who ate at another fast-food restaurant. Those
figures were even more dismal for those who placed orders inside
the restaurant and not at a drive-through window. Just 61.0% of
McDonald's customers were satisfied with those visits versus 84.6%
of respondents who dined in at another fast-food outlet.
-- When asked whether they visited McDonald's more often or less
compared with five years ago, more than double the number of
respondents (48.4%) say they visited less, rather than more
(20.4%). The biggest reason? Concerns about the food.
-- The survey asked respondents whether they would visit
McDonald's more often if it made certain changes. The bad news
first: 47.2% say none of the changes would make them visit more.
The good news: Offering all-day breakfast, an initiative McDonald's
is testing in some markets, would cause a third of Americans -- and
more than half of those who dined at McDonald's most recently -- to
visit more often.
-- Parsing the data further, the top reason fast-food customers
would go to McDonald's more often is if the chain introduces a new
value menu (36.5%), followed by all-day breakfast (34.6%) and
serving meat raised without hormones and antibiotics (34.3%).
-- People still like its food. McDonald's ranked fourth among 11
competitors on having "the best burger." Among those who dined most
recently at Big Mac, its burger ranked highest. It also can hold on
to its crown as the best purveyor of French fries, running away
with the title by a wide margin.
-- It has incredible reach, with more outlets than any other
chain except Subway. Over a recent seven-day period, 31.0% of
diners who visited a fast-food restaurant chose McDonald's. That's
more than the two next-closest competitors, Burger King (15.4%) and
Taco Bell (13.1%), combined. On top of that, nearly half of all 610
respondents had visited McDonald's at least once in the past
month.
-- McDonald's is particularly strong during breakfast. Of
respondents whose last fast-food meal was breakfast, 42.7% of them
chose McDonald's, compared with 21.5% for Starbucks and 10.8
percent for Dunkin' Donuts.
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McDonald's isn't blind to its shortcomings. Earlier this year it
ousted its chief executive, Don Thompson, and replaced him with a chief
with a track record of success across the Atlantic. The new CEO,
Steve Easterbrook, consistently has referred to his job as a
turnaround effort, one that will come slowly and in fits and
starts. His oft-repeated goal is to turn McDonald's into a "modern,
progressive burger company."
He still has a lot of work to do to rescue the company from its
reputation as a plodding giant averse to change and, of course, a
nearly two-year financial slump.
McDonald's, which was given access to the survey's highlights
before publication, said in a statement that it is "in the initial
phase of our turnaround." The company says it is "seeing pockets of
success in the Northwest, Heartland and Boston" and is "working
diligently to improve the customer experience through actions
focused on value, service and menu."
"This takes time," spokeswoman Becca Hary adds. "We're making
progress and continue to listen to our customers and evolve our
menu to meet their changing expectations."
Analyst R.J. Hottovy of Chicago-based Morningstar says the
results explain why McDonald's sales have slumped for seven
consecutive quarters. While competitors have simplified their
menus, introduced healthier products and updated their dining
rooms, "McDonald's has been behind the curve," he says.
Jack Russo, a St. Louis-based analyst at Edward Jones, says the
chain needs to improve its menu, the quality of its products and
the speed of service, all while staying sharp on price. "They
realize they've made some mistakes, and they have an opportunity to
turn this around," he says. "When I see Burger King and Wendy's
showing same-store sales growth, there's no reason McDonald's can't
get back to those numbers."
More findings of the survey will be available Sept. 1 at
8Sages.com.
--Peter Frost is a reporter for Crain's Chicago
Business
