Daily Management Review

McDonald's takes up healthy living


08/02/2016


McDonalds has decided to get rid of artificial preservatives in meals such as Chicken McNuggets, sausages, omelets, as well as in breakfast sandwiches.



Stephen McKay
Stephen McKay
McDonald's also replaced corn syrup rich in fructose, which is used in muffins, with sucrose. A year ago, the company promised to abandon antibiotics in poultry production because they can seriously harm human health. Then, McDonald's announced its intention to use chicken eggs laid in loose conditions (without cells). 

A few years ago, only a few innovative companies managed to keep up with consumer demand for healthier food, and they had to be content with a limited number of suppliers. However, social networking sites brought healthy living into vogue, and made McDonald's, along with competitors, to make significant changes in its food production.

For quite a long time, McDonald's has been criticized for being slow in reorganizing production of ingredients while smaller companies have already abandoned use of antibiotics in chicken. In favor of McDonald's, we may indicate that the company, with its 14.2 thousand restaurants in the US, will have to rebuild the entire supply chain for implementation of such changes.

McDonald's representatives explained that these changes increase expenditures, but the consumer will still get the desired. The company can compensate rising costs by reducing purchases of other food items and hedging instruments.

McDonald's President in the US Mike Andres said that changes in the supply chain would create some difficulties, but he was pleased with the progress. According to him, the new supply chain will be challenging for farmers.

Similar changes are taking place against the backdrop of slowing sales and stiff competition among fast food chains and supermarkets. Difference between eating at home and eating in fast food peaked over the past decade, which led to high competition and introduction of various promotions from fast food restaurants.

In late July, McDonald's reported a drop in revenue in the II quarter of 2016 by 3.6% due to lower number of fast-food customers, reports Reuters. Basically, number of McDonald's customers in the United States declined.

Comparable sales at US restaurants, which were open at least 13 months ago, have grown in II quarter by 1.8%, while analysts expected an increase of 3.2%.

Net income fell from $ 1.20 billion to $ 1.09 billion, or $ 1.26 to $ 1.25 per share, compared to the same period in 2015. McDonald's total revenue decreased from $ 6.5 billion to $ 6.27 billion.

Meanwhile, McDonald's franchisee express bewilderment, and even irritation with the company’s marketing steps. Recently, McDonald's introduced measures to preserve and increase the flow of guest: "Breakfast all day" and McPick 2 (two dishes of choice for $ 5) led to a slowdown in sales growth by 1.8%.

Franchisees were not initially thrilled with the ongoing marketing activities. Now, the franchised partners are warning that guests bargain for cheaper breakfast menu items for lunch and dinner as breakfast is on sale throughout the day.

"Breakfast all day" is a bad initiative", says one franchisor. "We are losing the customers of usual menu due to cheaper products for breakfast, instead of creating a new clientele." 

Operators also complained that McPick 2 affects their profits: "We had to reduce the prices greatly, but no one asked us if we want to do it, so that traffic will now go up and profits - down".

Experts believe that it is necessary to invest more in production automation to reduce labor costs, and compensate for those customers who prefer cheaper food. 

source: reuters.com, businessinsider.com






Science & Technology

Facebook may start production of its own microprocessors

Long-Term Alcohol Monitoring Could Be Possible With A New Injectable Chip Developed By U.S. Researchers

Sweden Now Has The First Electrified Road In The World

Over 270,000 Account Globally Banned From Twitter For Promotion Of Terrorism

Device Capable Of Hearing The Inner Voice Developed By Researchers

New mobile technologies will warn about natural disasters

The brewing industry welcomes blockchain

Asset-Sharing App Of Ryder Is Meant For Commercial Vehicles

Credit Suisse: China will become the leader in AI sphere

Five new technologies that will change the world

World Politics

World & Politics

Debates over Google are heating as a new EU directive is about to be introduced

Will Merkel accept Macron's plans for Europe?

USA and China are pushing North Korea to denuclearization

Germany's dilemma: Will the atomic energy win?

A Forceful Response To Syria Attack Will Be Given By U.S.: Trump

Is Trump’s Maximum Pressure Tactic On North Korea Succeeding Because Of China?

Why are Turkey-EU relations moving back?

Record-Breaking $39 Million raised for Rare Cancer Research in 2018 by Cycle for Survival