McDonald’s hasn’t been doing so hot lately. Same-store sales dropped in the third quarter of this year, which helped drag profits down 30 percent. Its CEO said the company’s facing “formidable” headwinds.
Large ships don’t turn easily, but one of the changes the company’s announced is a more regional focus, breaking the country into four zones (instead of its old three) to better respond to the individual tastes of customers in different parts of the country.
But for years, McDonald’s succeeded with a “one size fits all” approach.
“When we look at what has made McDonalds a strong brand, it’s consistency, convenience, affordability and strong fast service,” says Darren Tristano, with food-research firm Technomic.
However, he says diners today are more interested customization, like choosing what goes in their burrito at Chipotle.
This is especially important to millennials, says Andy Brennan, a food analyst at IBIS World.
“Millennials want something different,” he says. “They want to feel like things are customized toward them, they want the ability to choose, and they want high quality things, so unfortunately, McDonald’s doesn’t fit the bill for any of these requirements.”
“The marketplace today is increasingly dynamic and diverse,” Mike Andres, McDonald’s USA President said in a statement. “These changes will enable us to better leverage and support our local market management structure so that we are more nimble in response to and anticipation of the local customer needs and market conditions in a relevant and timely way.”
“The same things that worked nationally, don’t work nationally now,” agrees John Gordon, a food industry analyst with Pacific Management Consulting Group. He says a menu item like spicy chicken wings may play well with customers in Detroit, but miss with customers in Salt Lake City.
Gordon says this regional push is a small step for McDonald’s, but symbolic of the way it needs to decentralize—and a sign that bigger changes may be coming.
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