McDonald’s 24/7
Business Week Online
FEBRUARY 5, 2007
COVER STORY
McDonald’s 24/7
By focusing on the hours between traditional mealtimes, the fast-food giant is sizzling
http://www.businessweek.com/print/magazine/content/07_06/b4020001.htm?chan=gl
clubgoers
straggling home
cars barrel by
a commercial strip of big-box stores and chain restaurants
buttermilk biscuit
steel bowl
grilling sausage patties and eggs
clocked out
all-night convenience store
a McGriddle
a side of hash browns
the prices are cheaper and the brand is one he trusts
went 24/7
boost profits by extending store hours
night owls and early birds
“There are so many customers out there all times of the day,” he says. “We have to be out there, too.”
The clientele
joshing with one another
zipping from the pickup window
a midshift break
taking a breather
preschoolers scamper
carousing
the world’s biggest restaurant chain
busting out of its old boundaries
stretches up to seven hours
an all-day option
between-meal refuelings
late-night munchies
all-hours
McDonald’s. For most of its history, growth meant one thing: more locations
juggernaut
outlets
cranking out
a run of hit products
reached a saturation point
Cannibalism:
While overall revenue kept climbing, the new sites stole customers from existing locations
same-store sales
real estate
newly refurbished
McDonald’s is, of course, much more than an ordinary fast-food chain. It is a cultural mirror.
The changes at the burger company reflect the evolution of American eating habits.
longer drive times
busier after-work schedules
a home-cooked dinner
Father Knows Best
McDonald’s
The $21.6 billion company now feeds a record 27 million people (Americans) every day, 1 million more every year since 2003.
the food police
its two most popular foods
(the double cheeseburger and fries)
a nonissue
competitors
Starbucks (SBUX ), Wendy’s (WEN ), Burger King (BKC ), and Dunkin’ Donuts
national rollouts
triumphant
has such a lead that even its fastest-growing rivals may never catch up
“People’s days are longer, so are McDonald’s restaurant hours. This is a natural evolution to capture more business.”
is all optimism
Hosting breakfast
- It’s a simple secret, actually: Americans like to eat all day long. (Business Week)
retirees
had driven 14 miles
fetch breakfast for her daughter
high school swim team
egg-and-sausage bagels
Brown, 37, loves the wider variety of foods and drinks available at McDonald’s today. “I used to have to go to five different places for everyone. I’d have to go to one place to get bagels. Smoothies at another. Coffee at another,” she says. “Now I can get everything here, all at once.”
icons like the McMuffin
the McGriddle—a pork patty
syrup-infused pancakes
still plenty of room to grow
And new products attract new business
To build on this momentum
conundrum
plucks — from
the breakfast battle
“We’re promiscuous at lunch and dinner, but we tend to be monogamous at breakfast.”
Midday snackers
at Jamba Juice
enticement
a squirt of sauce
“It gives me enough energy to carry me for another two or three hours.”
crowd-pleasers
product development
the company’s food studio in Oak Brook
a staff of three dozen chefs, food technicians, and market researchers
The company doesn’t just assess sales. It also monitors costs and margins and judges how easy a new product is to prepare by a crew that is constantly changing.
The annual turnover among cooking crews companywide exceeds 100%
If the concept passes muster, McDonald’s expands its test cell to 800 to 1,000 restaurants in four to six markets
scant time
Case in point: the McShaker salad.
Introduced in 1999, it came in a large plastic cup designed to fit a car’s cupholder. Problem: Nobody could figure out how to eat a salad while driving. “We were more willy-nilly then,” says Skinner. “The attitude was, we’ll make it and they’ll buy it.”
in-store promotional signs and local advertising
tricked-out rvs to concerts, sports events, and bars
pitch twentysomethings with coupons and contests
Although it is well known for the sameness of its food and restaurants, McDonald’s is really a lot of different restaurants that cater to a lot of different people.