Since customers increased their awareness and decided to eat healthier fast-food company McDonald’s was forced to close a total of 700 chain locations this year. Just in the earlier part of 2015, the double arch company began to close down 350 stores; however, Wednesday it announced another 350 branches would be closing its doors to the public.
McDonald’s is experiencing a plummeting drop in profits due to stiff competition from healthier fast-food joints, more mindful consumers, and ‘an overcomplicated menu,’ according to Fortune. The golden arch company has experienced a 2.3% decrease in sales and a 28% drop in operating profits during the first three months of 2015. Projected sales for the next few months aren’t expected to get any better either.
The chain anticipated a drop in sales during the first quarter of the year, but experienced losses far beyond expected. By closing 700 of the poorest performing stores, McDonald’s hopes to regain its footing in the food business and re-establish itself as a top contender for hungry citizens to benefit from when on the go.
But unless reform is implemented by McDonald’s, where it begins to offer organic, local fare with GMO-free options, one can only predict it will continue to experience decreased sales in the near future.
The company’s new CEO, Steve Easterbrook, believes that his plan, which will be unveiled on May 4, will help to restore the reputation of the restaurant. “I think there is a hunger and an interest in our business to embrace change. McDonald’s management team is keenly focused on acting more quickly to better address today’s consumer needs, expectations, and the competitive marketplace,” said Easterbrook.
It’s not that consumers are choosing to opt out of fast food completely, they are just becoming more aware of how food affects their health. In response, they are choosing to consume healthier fare instead. As The Anti-Media noted, “GMO-free restaurant chain Chipotle saw a 10% sale increase over the same period.”
With giant companies like Monsanto and McDonald’s both reporting massive losses in recent months, one can only assume that big changes are underway health-wise in our world.
The restaurant company closed 350 stores in early 2015, on top of the 350 it had already said it would shutter, as the burger purveyor seeks to stanch sales declines.
McDonald’s MCD 0.43% shuttered 350 poorly performing stores in Japan, the United States, and China the first three months of 2015 as part of its plan to boost its sagging profits.
Those previously unannounced closings, disclosed on a conference call with Wall Street analysts on Wednesday, are on top of the 350 shutterings the world’s largest restaurant chain had already targeted for the year. While those 700 store closings this year represent a fraction of the 32,500 or so restaurants worldwide, they show how aggressive McDonald’s is getting in pruning poorly attended locations that are dragging down its results.
Earlier on Wednesday, McDonald’s had reported an 11% decrease in revenue and a 30% drop in profit for the first three months of year, a continuation of its troubles in the last two years as it has struggled to compete with new U.S. competitors, a tough economy in Europe and a food safety scare in Asia.
Source:
http://www.ewao.com/a/1-mcdonalds-to-close-700-locations-after-major-profit-losses/
Post a Comment