04 Feb 2015 The man who’s supposed to turn McDonald’s around
McDonald’s is looking to one of its high-profile British executives, 48-year-old Steve Easterbrook who will become its new CEO on March 1, to do again what he did in his home country for the world’s largest restaurant chain — this time on a much bigger scale.
Easterbrook has been McDonald’s chief brand officer — overseeing marketing, advertising and menu development — since he returned to the company in 2013 after a two-year absence. He started with McDonald’s in 1993 in London, leaving in 2011 to serve, in quick succession, as CEO of PizzaExpress and Wagamama Group, both UK-based restaurant chains.
He will succeed Don Thompson (left) on March 1 [who has been in the job for three years] as the company grapples with how to engineer a comeback amid falling sales and earnings. McDonald’s credits Easterbrook with boosting business when he ran McDonald’s outlets in the UK, where he tweaked menus and took on critics.
“That turnaround was very successful, so it’s not surprising they elevated him,” said Sara Senatore, an analyst at Sanford C Bernstein in New York. “That’s what the brand needs right now in several markets.”
In Europe, where he ran divisions between 2006 and 2011, Easterbrook was a “feisty advocate” for the brand and invested in new food-ordering technology, making him a good choice to lead a revival agenda built around innovations such as customisable burgers and self-ordering kiosks, said Asit Sharma, an analyst at the Motley Fool.
“The work he’s done on digital innovation and brand enhancement is central to McDonald’s effort to reinvent the customer visit,” Sharma said. “He seems to have an intuitive understanding of the value of PR, and will be valuable in changing customer perceptions about McDonald’s.”
While heading the UK unit, Easterbrook engaged in a televised debate with Eric Schlosser, an industry critic and author of the bestselling “Fast Food Nation,” and set up a website, makeupyourownmind.co.uk, where customers can post questions. He told the British newspaper The Telegraph in 2006 that he ate a McDonald’s meal every day, and that the Quarter Pounder cheeseburger was his favourite.
In the UK, he oversaw about 1,200 McDonald’s restaurants. As CEO, he’ll have a comparatively massive job, with more than 36 000 outlets in 100-plus countries. In the US particularly, his challenge will be to make the McDonald’s brand appealing to millennials who have flocked to fast-casual rivals like Chipotle Mexican Grill and Panera Bread.
McDonald’s has also faced price pressure as it competes for value-conscious customers with fast-food chains such as Burger King.
McDonald’s said recently it would spend about $1-billion this year to spruce up restaurants, adding mobile payment options and table service in Europe and expanding customisable burger features in the US. Easterbrook will also oversee plans to streamline the menu to speed up service and simplify ordering.
The sales slump is McDonald’s worst in more than a decade. Net income fell 21% in the fourth quarter; in the US, where there are about 14,350 restaurants, the 2014 sales drop of 2.1% at restaurants open at least 13 months was the worst since at least 2001.
Source: Financial Post
• McD’s move erodes ranks of black CEOs /Crain’s Chicago Business
• McDonald’s and its challenges worldwide: a market-by-market look /Financial Times
• Meet the man who’s supposed to turn McDonald’s around /Quartz
Click these links to read other profiles by the BBC, Business Insider, and the Financial Times …..