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For the First Time, McDonald’s Shrinks In Size


Restaurants continue to act like the good ol’ days of 2008 are coming back someday.

Instead of re-thinking how they service their customers through more innovative delivery platforms and technological solutions, many of them are just following Business 101: closing under-performing stores and hoping that will turn around lagging sales.

This is the “solution” McDonald’s has chosen: close up to 700 restaurants in the US.

They’re not alone. Burger King and Arby’s are just two of the chains who have seen their overall unit number drop (Arby’s by 10%).

The Golden Arches never seemed to be in that pickle, with store growth and sales as reliable as a digital watch. But for the past two years, that reliability has been absent. And for the first time since records were first kept, the company will be closing more stores than it opens.

Is it because Americans no longer want fast food? Does Mickey D’s have a confusing, bloated menu (as many franchisees complain)? Or have consumers’ taste become more specialized, with burgers eaten at Shake Shack, chicken at Chick-Fil-A, or Chipotle for anything vaguely Mexican?

McDonald’s shouldn’t be counted out just yet. Among the 100 largest chains in the US, it has 16% of sales with per unit volumes of $2.5MM over its humungous 14,000 locations (three times its next-largest rival, Subway).

Read the full article here.