No News Is Good News: McD's Decides to Keep Dismal Sales Figures to Itself
After 11 straight months of declining same-store sales, McDonald’s has come up with a quick and nifty way to stop the monthly spate of headlines chronicling the fast-food giant’s chronic slump: Simply stop reporting monthly same-store sales.
May numbers will be reported on June 8, a company spokeswoman tells Bloomberg Business. After that, rubberneckers captivated by what appears, as of now, to be the slow-motion collapse of a once unassailable American brand will have to content themselves with quarterly reports. So while the company will likely continue to futz with its menu, adding and dropping and changing offers here and there—buns will now be toasted for five seconds longer, by the way—those changes won't be so easy to condemn as failures when the next month's sales figures are reported.
To be fair, other major restaurant corporations, including Chipotle, Starbucks, and Yum! Brands (owner of Taco Bell, Pizza Hut and KFC), don’t provide such month-to-month sales data. McDonald's, however, sits directly at the locus of the health and labor concerns that swirl around fast food; a deflection of some of that attention it receives as a symbol of the low-pay-and-unhealthy-food business model could help the world’s biggest fast-food chain's struggles to reverse its fortunes. Industry analysts say the move could shift McDonald’s and its shareholders' focus to the long-term turnaround strategy recently unveiled by the company’s new CEO, Steve Easterbrook, rather than get fixated on what’s happening one month to the next.
“The monthly reporting just lends itself to more volatility, and I think investors focus on short-term issues,” Jack Russo, an analyst at Edward Jones & Co., tells Bloomberg Business. “It’s a good move. Quite honestly, it’s kind of long overdue.”
Nevertheless, the move can only add to an image of a company that seems increasingly under siege, as the past couple months have been nothing short of a rolling PR nightmare for McDonald’s.
Despite a ban on press reporting from inside the company’s annual shareholders' meeting last week, the event still generated a slew of negative headlines, with thousands of protesters massing outside McDonald’s headquarters in Oak Brook, Illinois. Inside, activist shareholders pointedly questioned a range of company practices, from its low wages and lack of benefits for workers to its marketing of junk food to kids.
Earlier in the month, Easterbrook announced his much anticipated turnaround plan for McDonald’s; a headline over at Fortune would seem to pretty much sum up the general reaction: “McDonald’s fix-it plan fails to impress: where’s the beef?”
If investors shrugged off Easterbrook’s lackluster plan, which Fortune declared short on details and lacking a sense of urgency, the franchisees who operate a vast majority of McDonald’s stores across the U.S. appear to be on the verge of open revolt.
A survey of franchisees conducted by Janney Capital Markets—and following the announcement of Easterbrook’s plan—found relations between franchise operators and their corporate parent to be at a record low, Business Insider reports. In the more than 11 years that the annual survey has been conducted, the six-month outlook of franchisees for McDonald’s business in the U.S. was the worst ever.
“There is no leadership, no plan, no respect for operators or their investment or bottom line,” one survey respondent wrote.
Another: “We will continue to fall and fail.”
Still another, who attended a turnaround summit at McDonald’s HQ, wrote: “Instead of acknowledging and solving the real problems facing us today, they chose to pretend that everything is normal and to look at what the restaurant of the future will be. They did nothing to address what the REAL problems are in our system: significant financial problems for owner/operators and menu complexity.… It’s as if they have NO CLUE of what our world looks like.”
For disgruntled franchise owners, that world has been governed by McDonald’s seemingly schizophrenic efforts to be “all things to all people,” even as the business model that brought the chain to global dominance—from low-paid workers to assembly-line production of cheap, processed food—has become a liability among a generation of more socially conscious consumers.
Needless to say, not announcing monthly same-store sales figures won't solve that problem.
As another attendee of the overhyped turnaround summit griped: "Why go out to cheerleading camp when you don't have a direction in mind and the team is in shambles?"