Is the age of McDonald's over?


McDonald’s is going through a difficult time.

Same store sales have fallen for multiple quarters and the burger chain has been hit with a number of PR snafus—mostly abroad.

Objects like vinyl and a human tooth have been found in French fries and chicken McNuggets at McDonald’s Japan forcing the company to issue an apology and drop their chicken nugget distributor.

McDonald’s Japan has seen nearly six straight years of sales declines.

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Meanwhile, there is a French fry shortage at McDonald’s Venezuela and the local government is not taking it well.

Venezuelan state-sponsored newspaper, Telesur, published an article with the headline, “McDonald's joins economic war against Venezuela." Venezuelan president Nicolas Maduro also tweeted negatively about the company.

In the U.S., McDonald’s has unveiled a shiny new marketing plan to address falling sales.

In order to appeal to those who want healthy, fresh food, McDonald’s will allow for an increase in local autonomy. That means that chain owners will be allowed to give menus more of a regional flair.



Nationally, McDonald’s will work to simplify its menu and introduce the “Create Your Taste” initiative, which allows customers to personalize their burgers.

A redesign is also in store for the fast-food behemoth. The company unveiled new minimalist bags and changed their slogan from “I’m lovin’ it” to “Lovin’ is Greater than Hating.”

Also in store? An ad campaign that focuses on transparency and an increase in customer interaction. “We’re moving from a philosophy of, 'billions served' to 'billions heard,'" says an official McDonald’s statement.

Related: Furor over french fry shortage at McDonald's in Venezuela

Despite all of these efforts, McDonald’s stock (MCD) has fallen about 6 per cent over the past six months.

“On every fundamental metric, things have been really bad for McDonald’s,” says Yahoo Finance’s Jeff Macke.

This could be because of temporary PR problems but “if you put it in the context of every other fast food operator and the price of gas, these are tailwinds that a fast food operation can’t afford to ignore.”

Competitors like Wendy’s (WEN), Jack in the Box (JACK) and Sonic (SONC) are seeing large gains and are actively taking market share away from McDonald’s.



McDonald’s still owns a whopping 50 per cent of the U.S. fast food market but that share has been shrinking over the past few years.

“I have no idea what the fundamentals are going to be for the next six months on a global economic scale but they’re not going to be better for McDonald’s than they were over the last six months,” says Macke.

He believes that the relatively flat stock price is actually equivalent a 20 per cent or 30 per cent decline.

Related: McDonald's sees simpler menu as key in turnaround

These turnaround efforts are just too little, too late, says Macke. “You spin around too much and you’re kind of just whirling in circles.

They’re kind of slowly responding in a number of ways but it has a real ‘90s feel of ‘hey how about a salad?’ They’re just kind of chucking stuff out there.”

Macke says that McDonald’s can’t do too much to change its image at this point; he thinks it might be time for shareholders to go elsewhere.