A BLOCK FROM MY APARTMENT BUILDING in northwest Washington, there was a McDonald’s restaurant that catered to the elderly, a few homeless, and tourists from the nearby zoo. The wait was long and the service slow. There might have been only two or three employees in the kitchen putting all the orders together. Even at the height of the lunch rush there was never a sense of efficiency: By the time you received your order, it was already half wilted. After a while, the number of patrons dwindled to a handful. One day a few months ago, it closed.
A block south of my office, there was another McDonald’s located in a dungeon-like food court at the Farragut North Metro stop. Here the lines were always long during the noon hour, though it didn’t take forever to get your order. The problem was the quality. The food just didn’t taste good. It was sloppily prepared. And then there was the matter of cleanliness. Bad enough you were in a basement level food court next to a train stop. But some of the workers didn’t strike you as role models for hygiene. I noticed one swarthy server, in particular, whom many customers tried to avoid. He would mumble and constantly run his fingers through his long, stringy, and unkempt hair. His shirt often came undone and you’d be witness to his tucking it back in, his hands going deep down the front of his pants.
“You want fries with that?”
THIS FRANCHISE closed down as well. Both restaurants were the class of operations that new McDonald’s CEO Jim Cantalupo deemed unacceptable. Before he took over in January 2003, the company was in free-fall: The frequent complaints of lousy service and poor quality led to a mass exodus and an average store gross that dropped 12 percent from 1995 to 2002. According to Forbes.com, “by the fourth quarter of [2002], the company had its first loss, $344 million, since first selling shares to the public in 1965. By New Year’s Eve, its shares hit $16, a low not seen since 1995.” Stock analysts were advising their clients not to buy any more shares of the fast-food giant, explaining that the more than 31,000 locations worldwide had saturated the market and were now eating into each other’s profits.
Jim Cantalupo had already retired as president and CEO of McDonald’s International in 2001 when the board of directors asked him to take to the helm. And out of a love for a corporation he joined in 1974, he took on a task many thought insurmountable. Nevertheless, over the last year, McDonald’s has undergone something of a revolution.
Starting last May, same-store sales were back on the rise, capped off in February by a more than 20 percent increase–meaning 11 consecutive months of positive news that has jolted the stock to almost $30 a share. At an investor presentation earlier this month in New York, chief operating officer and president Charlie Bell explained how Cantalupo and his team “focused the entire McDonald’s System on the five drivers of superior customer experience–people, products, place, price, and promotion–which will result in enduring profitable growth for McDonald’s global business.”
So what exactly was done? Whereas 1,250 McDonald’s franchises opened in 2002, only 500 opened last year. And more than $700 million is being spent to improve some of the already existing stores which find themselves in deteriorating shape. Most striking is the announcement that by the end of the year, “Super-Sizing” will go the way of the McDLT and become a thing of the past. Some analysts insist that outside pressures forced McDonald’s to cave in and no longer offer 7-ounce fries and 42-ounce drinks for a mere 39 cents extra. Obesity critics pointed out those Super Size fries add up to 610 calories while the extra-large vat of soda comes to 410 calories. There is also an upcoming documentary entitled Super Size Me, in which filmmaker Morgan Spurlock subsists on McDonald’s for an entire month and gains more than 20 pounds. (But is the gain in fat or muscle?)
McDonald’s, however, insists the phase-out is simply a “component of this overall menu simplification” (according to a press release) and calls it part of a “balanced lifestyle strategy.” Either way, it seems to be working.
THEN THERE’S THE ADVERTISING ASPECT. Apparently “We love to see you smile” isn’t cutting it these days. Instead, an international team of creative talent came up with “I’m lovin’ it.” The commercials are clearly aimed towards the 30 and younger crowd with its hip-hop beat (by Justin Timberlake) and guys playing basketball (but on rollerblades?). In another ad, a man is licking ice cream off of a girl’s . . . shoulder. It is unclear (at least to this writer) how effective the ads are in bringing in more families. But the message is undoubtedly unified. The marketing scheme in Germany is identical, with the motto “Ich liebe es” (I’m lovin’ it), while in Mexico it’s “me encanta” (I’m lovin’ it), and in France it’s “c’est tout ce que j’aime” (It is everything that I love, or, I’m lovin’ it). McDonald’s has also signed on NBA star Yao Ming, whose appeal here and in China (with its 580 restaurants) is sure to drum up more sales than previous NBA pitchman Kobe Bryant.
BUT AFTER LEARNING about these new developments, I had to find out for myself if the “new” McDonald’s is really worth the hype. I stopped at the local McD’s in the Van Ness neighborhood yesterday, a restaurant one of my colleagues dubs “the flagship.” The place was crowded on a weekday for lunch, with pencil-pushers from the local office park standing in line with construction workers, security officers, the elderly, and students from area high schools. Everyone was going about their business pleasantly and the lines moved swiftly. The staff was predominantly Hispanic and the manager was extremely hands-on, doing as much of the work as the salad washers. Everyone was friendly and there was no problems getting my order (a Big Mac and 10-piece McNuggets–a necessity since I needed to try the new white-meat dish). I then topped it off with a hot fudge sundae; I could feel heat emanating from the fudge as it sank into the cup.
It was a filling meal (a heavy price to pay for the sake of journalism) and I don’t dare think about the calories. (For those who dare, click on here and watch the possibilities.) The most welcome surprise from my meal was the self-serve counter where customers get free refills on soda and can help themselves to as much hot mustard, sweet and sour, and barbecue sauce as they desire.
The overall experience was a pleasure. It wasn’t Morton’s but for what you pay, and for the superb service you are given, it was worth it. Best of all, none of the employees went digging into their pants.
Victorino Matus is an assistant managing editor at The Weekly Standard.
