McDonald's has seen its fair share of failures over the years — and for many of them, they've
only got themselves to blame.
From chicken wars, to bloated menus, to the rise of the machines, here are some of the
worst decisions McDonald's has ever made.
These days, McDonald's have so successfully cemented their reputation as the world's leading
burger chain that it's easy to forget some of their attempts to break out from the hamburger
niche.
In the 1980s, McDonald's was double the size of its next biggest competitor and owned nearly
40 percent of America's burger market.
But the wider world remained unconquered, and McDonald's execs had their eyes set firmly
on a very different kind of food.
"Pizza time."
In 1986, rumors began to appear that McDonald's were going to introduce a pizza option to
the menu, in order to bring in more customers during the evening hours.
In pursuit of this goal, the company spent years developing an oven that could quick-cook
pizzas in just six minutes.
Eventually, they succeeded — and by 1989, around 24 restaurants in America were testing
the McDonald's pizza.
But things went very wrong, very quickly.
Busy restaurants took too long to make the pizzas, which led to serious dissatisfaction
amongst McDonald's customer base.
It didn't help that they ended up costing far more than customers expected, either.
But for some reason, the company decided to expand their pizzas even further, to nearly
40 percent of their stores by the early '90s.
Before long, they were gone — and years of research, patents and preparation went
to waste.
In 1996, McDonald's introduced the Arch Deluxe.
This new menu item was aimed at adult customers, and was intended to be a more sophisticated
burger than people were used to seeing in stores.
But the Arch Deluxe itself wasn't the big mistake here.
No, that honor goes to the sandwich's marketing campaign.
McDonald's spent an estimated $150-200 million advertising the introduction of the Arch Deluxe.
If you need that put in perspective, that means that trying to sell this burger cost
more money than it took to produce James Cameron's Avatar.
Of course, only one of those things ended up making over a billion dollars… and it
wasn't the grown-up burger.
In the end, the Arch Deluxe sold far short of what executives hoped it would, partly
thanks to the fact that it cost well north of $2, which was a hefty price to pay for
a fast food burger at the time.
By the late '90s, the Arch Deluxe had been discontinued, a bunch of McDonald's suits
had been bitterly disappointed and, presumably, someone learned the valuable lesson that throwing
money at a problem isn't always going to fix it.
These days, environmentalism is such a hot topic that even the world's biggest mega-corporations
are willing to make at least a few token gestures towards going green.
Back in the day, however, things were very different — and nothing illustrates that
better than the McDonald's double clam shell.
This container, which used 100 percent more polystyrene packaging than a normal McDonald's
clam shell, was designed for the McD.L.T. — a burger that had its hot and cold ingredients
separated before serving.
One clam shell contained the bottom bun and meat, while the other contained lettuce, tomato,
cheese, pickles, sauces and the top of the bun.
Unfortunately, by the 1980s, people had started to become more aware of environmental issues,
and the double clam shell was immediately embroiled in controversy.
Before you could say "this weird gimmick is going to get a lot of seabirds killed", the
McD.L.T. was removed from menus — and the double clam shell was no more.
The fallout from the double clam shell scandal clearly remained, however, because in 1990
McDonald's did that rarest of things: they made a good decision.
After coming under intense scrutiny for serving their burgers in polystyrene, the company
finally announced that they would be discontinuing foam packaging and serving all their food
in paper from that point on.
Okay, sure, it's plastic-coated paper — but even that's a start, right?
Yes, the Chicken Wars are a thing, and no, they're probably not what you're thinking
of right now.
The 'Chicken Wars' is the name given to the flurry of business activity that has whirled
up around an ongoing trend towards serving chicken in the fast food industry.
Brands such as Chick-fil-A and Popeyes are bringing the chicken sandwich onto the beef
burger's level, and the headlines they're making appear to demonstrate that chicken,
not beef, is the future of fast food.
The big deal here is that McDonald's are sitting this one out.
Despite seeing some success with their buttermilk chicken sandwich, the chain isn't really pushing
ahead with chicken-based menu items — or, at least, not as hard as their competitors
are.
There might be any number of reasons for this, including the fact that McDonald's healthier
artisan grilled chicken sandwich has seen relatively low sales.
But they're missing out on a huge opportunity here.
In 2019, Stephens analyst Will Slabaugh explained:
"There is room for the largest quick-service player to take advantage of the hole at the
high end of its barbell on the chicken sandwich side, and create a true competitor to the
leaders."
For now, McDonald's is leaving a whole field mostly unplayed — and that's never going
to turn out well.
You probably already know this, but McDonald's like things big.
Like, really, really big.
But the company's obsession with making things bigger and better has actually caused more
than a few problems in recent years.
Nowadays, the McDonald's menu is massive.
In 1948, McDonald's only served nine different dishes, but today the menu features over 100
different items, as the company has attempted to draw more and more customers away from
its competitors.
Unfortunately, the knock-on effect of giving consumers so much choice has been that the
wait for food and drinks at the restaurants themselves has become much longer.
For example, McCafe drinks have to be made at a separate station behind the counter that
is kitted out with specialist equipment.
The McWrap is another serial offender.
This item is supposed to be assembled in 60 seconds or less, but reports suggest it takes
workers over 85 seconds to do so, which skirts far too close to McDonald's goal of serving
drive-through customers in fewer than 90 seconds.
The pizza travesty of the late-80s showed well enough that customers come to McDonald's
for speedy service — and if you slow that service down, you lose those customers as
a result.
The longer McDonald's wait times get, the worse the company is going to perform.
Everyone's got their own regrets, and nobody ever feels good about them.
But whatever missed opportunities or silly mistakes haunt you from your own past, at
least take solace in this: none of them cost you tens of billions of dollars.
You can't say the same for McDonald's, though.
You see, McDonald's once owned a 90 percent stake in the equity of a little company called
Chipotle.
In fact, it was McDonald's that helped out with capital, operation costs, and distribution
for the burrito chain, and thanks to its patronage, Chipotle thrived.
For some reason, however, McDonald's decided to sell its ownership of Chipotle for $1.5
billion in 2006.
Today, Chipotle's market cap stands at around $21 billion.
Unfortunately for McDonald's, the losses don't end there.
In recent years, Chipotle has managed to gut McDonald's younger consumer base by offering
healthier-style food made with higher-quality ingredients.
A 2014 study suggested that American consumers in their 20s and 30s were positively flocking
towards chains like Chipotle, simply because they believed those chains made better food.
And while McDonald's haven't exactly been destroyed by Chipotle, you can't help but
imagine they're feeling at least a little sore about this whole deal.
After all, they sunk a heck of a lot of time and money into supporting that smaller company...
and then lost it all by selling out and turning that company into a rival.
Generally, McDonald's has made a point of staying out of politics — and from a strictly
business perspective, that's probably the sensible thing to do.
After all, why provoke anybody when all it'll bring you is trouble?
But that all changed in early 2019, when McDonald's decided to provoke… well, pretty much everybody.
At the time, India was going through an election.
In an admirable yet incredibly misguided attempt to make a political point, McDonald's decided
to set up a marketing stunt at one of their branches in Hyderabad.
As customers came in and made their order, the employees would respond by ignoring their
order and giving them something completely different.
When questioned about this, the employees would point out that, if you don't vote, you
lose your right to choose.
Now, anyone would be annoyed if this happened to them, even on the best of days.
But shortly after the stunt took place, a writer for Inc. raised another good point.
How would you feel, as an Indian voter, if you saw a video in which a U.S. corporation
nagged you about the importance of voting?
When the U.S. falls far behind most other developed nations in terms of voter turnout,
no less?
You wouldn't be thrilled, that's for sure.
The Fight for 15 is a movement dedicated to getting exactly what it's named after: a $15
per hour minimum wage for workers in the fast food industry.
Despite gathering steam over the last few years, in 2018 McDonald's found themselves
very much on the wrong side of history when they were accused of using intimidation tactics
to fight back against the Fight for 15.
"Maniacal laugh.
Maniacal laugh.
Maniacal laugh!"
According to some of the workers behind the Fight for 15, McDonald's had fought with everything
they had to keep workers' wages low, spending tens of millions of dollars every year to
lobby politicians into fighting wage increases.
And that wasn't the end of their troublesome tactics, either.
In 2017, Memphis police officers threatened to arrest striking workers, telling them that
they had authorization from the president of McDonald's to do so.
Meanwhile, one franchise owner even joined a group of police officers who followed workers
home after a protest had ended.
In 2019, however, McDonald's finally backed down and agreed to halt lobbying against minimum
wage hikes.
McDonald's vice president of government relations said:
"The conversation about wages is an important one; it's one we wish to advance, not impede."
Here's something you will have noticed if you've stepped inside a McDonald's at any
point over the last few years: the robots are taking over.
"It doesn't feel pity or remorse or fear.
And it absolutely will not stop… ever!"
Okay, maybe it's not that bad.
Yet.
Automated kiosks were introduced to McDonald's stores a few years ago, and the company spent
a billion dollars on kiosks in 2019 alone.
Apparently, the main incentives for their use are faster service, more accurate orders
and the opportunity to place more workers in the kitchen, increasing productivity.
That's what McDonald's say, at least.
In fact, McDonald's are even going a step further than that: in 2019, the company began
to implement AI technology at some drive-thrus, in the hope that technology will make the
drive-through ordering process that much more efficient.
But although McDonald's has thrown itself full-force into backing the automation revolution,
this efficiency will doubtlessly come with a human cost.
After all, replacing workers with machines often means both cutting workers' hours and
laying people off.
In some restaurants, however, automation has indeed led to an increase in staff members.
These branches often retain human servers for customers who prefer that interaction,
or keep them on to fulfill the company's new commitment to table service — a feature
brought in at the same time as kiosks.
The fact is, however, that McDonald's wants speed, efficiency and cost-effectiveness above
all else.
Unfortunately, there's a real risk that pursuing those goals will require the company to make
some difficult and regrettable decisions in the near future.
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