McDonald’s Refocuses on Value, Service, Marketing and Menu

QSR chain to take 18 months to redevelop its brand strategy

McDonald's golden arches

OAK BROOK, Ill. -- Retailers can expect McDonald’s to double down on its dispensed-beverage program, among other enhancements, and the chain looks to rebrand itself over the next year and a half.

McDonald’s will take the next 18 months to develop a lineup of new menu items and revive its brand, according to a Bloomberg report. The world’s largest quick-service-restaurant chain needs to be an appealing place to eat, not just a cheap one, executives said this week.

The chain told investors it is taking the next year and a half to regroup after sales continued to slide in the recent quarter and as such competitors as fast-growing Chipotle Mexican Grill seem to be leaving the burger leader behind. In McDonald’s case, however, the repositioning won’t necessarily involve the typical hallmarks of a rebrand, such as a new logo or total design overhaul, according to the report, but will instead focus on reworking the basics: better value, service, marketing and menu.

The goal is to become a “more trusted and respected brand,” said Don Thompson, McDonald’s chief executive, on Tuesday’s earnings call, according to the report.

“I am confident that we're taking the right steps to strengthen our foundation and position the company for future growth. Our charge over the next 12 to 18 months is to accelerate the changes, effectively communicate the enhancements to our customers and execute at the highest standards in our restaurants.”

The McDonald’s brand—eroded over the years by service problems, dietary concerns, lack of blockbuster product launches, and recent employee-pay issues—isn’t one many consumers feel too good about anymore, Bloomberg said. According to Infegy, a company that analyzes social media, 38% of online conversations about McDonald’s over the past year have been negative.

To create a dining experience “customers will feel good about,” as Thompson put it, McDonald’s has turned a West Coast restaurant into a “learning lab” to gather feedback about the food, environment and other aspects of dining at the Golden Arches.

As the chief executive has said in the past, the McDonald’s renaissance will encompass a simplified menu, remodeled restaurants and such modern amenities as Wi-Fi. The company will also open more restaurants and expand its digital efforts. Core products, such as the Big Mac, Egg McMuffin, and fries—three items that account for about 40% of sales—will be at the center of the food efforts, and expect menu additions to be focused around “premium” beef and chicken items, breakfast food, and coffee and blended ice drinks.