McDonald’s has reached a new, but probably unwanted landmark in its history — for the first time in 40 years, the number of U.S. outlets it runs will shrink.
The iconic fast food company has enjoyed continuous expansion for much of its history, but this year will close more American stores than it opens.
McDonald’s has not reported an annual reduction in the domestic U.S. market since at least 1970, according to archives at the Securities and Exchange Commission.
The McDonald’s public relations department was keen to put a positive slant on the news. Spokeswoman Becca Hary would not offer a specific figure of the U.S. closures, but insisted they would be “minimal,” and indeed insignificant when viewed in the context of approximately 14,300 U.S. restaurants.
Hary claimed that the closures were part of a restructuring strategy that would enable future growth.
The plans involve cutting nearly $300 million in costs each year and shifting further towards a franchise model.
McDonald’s is still experiencing growth globally, and has plans to increase the number of 36,000 worldwide restaurants by 300.
McDonald’s has been under pressure for the last decade, losing market share, sales and customers to companies such as Chipotle and Five Guys, a consequence of changing consumer expectations and preferences.
Mc Donald’s has struggled to keep pace with and adapt its business model to evolving demographics.
“Millennials” — today’s target consumer — are a new generation of teens and parents with a different mentality, oriented towards fresh, organic and healthy rather than fast, cheap and convenient.
The company’s image has also been damaged by a number of heavily reported controversies — issues involving the use of genetically modified ingredients, public health concerns over obesity, employee welfare and environmental sustainability.
McDonald’s has launched numerous rebranding campaigns over recent years in attempt to replenish the companys image, but it hasn’t been enough to thwart the challenges of new competitors.
Probably the most infamous of these marketing endeavours was a misguided revamp of Ronald McDonald, the restaurant chain’s mascot, described by commentators as “terrifying” and “bat shit crazy”.
