McDonald’s UK business has turned from downsize to upsize in the last decade.
The company began operating in Britain exactly 40 years ago – 1974.
But in the mid-90s its popularity was hit by the Super Size Me documentary. McDonald’s rapid expansion of outlets was also increasingly challenged by rivals such as Pret a Manger.
A number had to shut. The chain is only now returning to the 1,250 of a decade ago.
Jill McDonald, chief executive since 2010, claimed that although the company believed the documentary was not balanced, it was “a bit of a wake-up call” for better communication about “the quality of our food”.
Customer research followed by investment was “absolutely number one” in gaining competitive advantage. She cited the company’s investment in quality such as “freedom food pork, free-range eggs or 100% breast meat in chicken nuggets.”
It has also invested in “different foods – such as the introduction of wraps, blended ice and a number of other items – while still retaining the speed of service.”
McDonald’s was little touched by the horsemeat scandal in 2013, while supermarkets, restaurants and rival burger suppliers floundered. A government report into the crisis praised the company for sourcing its beef from British sources in a short and transparent supply chain.
Some of McDonald’s resurgence in the UK is down to attracting people for breakfast as well as late at night. Nearly half of all its outlets open 24 hours.
The company relies heavily on its franchise operations – more than 70% of UK outlets are franchise-run having agreed to a 20-year licence and an average investment of £150,000.
Franchisees may set their own prices, but the menu and recipes for core items are dictated by the company.
But the popularity of the hamburger has not been underestimated by competitors, some now offering more upmarket versions.
CEO McDonald says of McDonald’s that it will be “fast-following” consumer trends, hinting about things “lined up over the next two, three, four years and the investments we are planning to make in the next generation”.
“What we are pretty good at is fast following. We see a trend and are able to democratise it – so give great quality, more convenience, and at better prices than the competition,” she added.
