McDonalds Goes Upscale to Woo European FastFood Customers

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McDonalds Goes Upscale to Woo European Fast-Food
Customers

• Dillon Strube
• Jaime Zyskowski

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McDonalds History

• The first McDonald's was built in 1940 by the
  McDonald brothers (Dick and Mac).
• 1955 Ray Kroc bought all rights to the McDonald's
  concept from the McDonald's brothers for 2.7
  million.

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History (Cont)

• 1967 The first restaurants outside of the USA
  opened in Canada and Puerto Rico.
• 1978 The 5,000th restaurant opened in Kanagawa,
  Japan and it made US 1 million in its first
  year.
• 1987 McDonald's is serving 20 million people a
  day in nearly 10,000 restaurants in 47 countries.

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Article Summary

• McDonalds is overhauling most of its European
  restaurants due to a sales slump in the 1990s.
• The concept of fast food was not received well in
  Europe for cultural reasons.
• Ex. French people enjoy more gourmet foods, and
  like to savor their meals.
• Needed Adaptation!

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European Consumer Issues

• Concerns about obesity.
• Unappealing décor.
• Annoyance of grumpy employees.
• "Reimaging is essential in the competitive world
  of retail."
• -Denis Hennequin, President McDonalds Europe

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European Changes

• Upscale décor.
• 9 new restaurant designs.
• Introducing healthier foods.
• Catering to regional tastes.
• Porridge in England, Soups in Spain, French
  cheeses on burgers in France.
• Internet access.
• iPod rentals.

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Reasons for Adaptation

• Europe is an extremely important market for
  McDonalds (36 of operating income).
• Wanted to attract more young adults and
  professionals in addition to their target segment
  of children.
• Cultural differences.

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Results of Changes

• Combined sales of Europes 6,400 restaurants rose
  15 (4.1 billion).
• After refurbishment in France, sales increased to
  4.5 on average.
• Refurbishment has caught on in the US where they
  have redesigned 6,000 of the 13,800 restaurants.

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Questions?