As surprising as it may sound the McDonald’s food chain has started closing down its restaurants for the first time in over 40 years. Last time the company closed its stores was in 1970. According to a McDonald’s spokeswoman, Becca Hary, the number of closed restaurants will be minimal compared to the 14.300 locations which the fast-food chain has in the US.
The company had already announced in April that they are going to close almost 700 locations from all over the world because they are underperforming. This is not something surprising because underperforming stores close each year. However, so far, the number of restaurants which were closed was surpassed by the number of the newly-opened ones.
On March 1 the new McDonald’s CEO, Steve Easterbrook, stepped in and made known his plans regarding the reconstruction of the company through removing layers of bureaucracy.
According to Hary both franchises and company-owned locations will be closed. She explained that this move is part of a strategy which intends to set the stage for the future growth. McDonald’s has not provided a list of the restaurants which will be closed. The company has also refused to make any comments regarding the last time when they reduced the number of US locations. However, taking into consideration how successful the company was starting with its early years of existence, this might be the first time McDonald’s has ever retreated ever since 1955, when the company was founded by Ray Krok.
The fast-food chain has enjoyed a quick expansion because it offers consistent food at an affordable price. McDonald’s was doing great even in times of recession. But it seems that ever since then other fast-foods such as Chipotle have gained popularity because they claim to sell better and healthier food. McDonald’s might have attracted people during the recession with its Dollar Menu and McCafe products, but now Chipotle’ Five Guys Burgers and Fries seems to be stealing McDonald’s customers away.
McDonald’s executives say that the overly complicated menus which the restaurants offer lead to inaccurate orders and this is why customers have to wait longer. In addition the fast-food chain is believed to have failed with keeping up with the changing tastes of the customers.
Restaurant industry analyst from the Pacific Management Consulting Group, John Gordon, explained that McDonald’s past success was owing to a natural overconfidence. He also remarked:
“McDonald’s is such an internally focused organization, it’s a situation where you don’t have a fresh perspective coming in.”
Image Source: Food World Order