McDonald’s recently reported that their same-store sales (at stores open at least 13 months) fell a whopping 4.6% month-on-month. That’s coming on the heels of a brutal fall in sales overall since early 2012. Global same-store sales also fell 2.2% month-on-month, suggesting that while the US was particularly hard hit, the backlash against McDonald’s is worldwide. The chain also announced that their fourth-quarter results would be negatively affected by both the fall in sales and a supply issue in China, to the tune of $0.07 to %0.10 per share.
Analysts have suggested that the fall in sales has been sparked by a shift in consumer preference towards chains like Chipotle, which offer greater personalization and customization, and somewhat more health-conscious food. Ironically, McDonald’s was an early investor in Chipotle, starting in 1998, but had fully divested itself of stock in the company by 2006—they were once a controlling interest in the competition that may now be killing them. Chipotle had 500 stores in 2006; it now has 1600, with a net income of $327.4 million in 2013. During third quarter 2014, Chipotle sales rose 19.8%, while McDonald’s fell 3.3%.
The question to be asked, however, is whether the shift towards outlets like Chipotle and away from McDonald’s is about awareness of the negative effects of McDonald’s on individual health and overall sustainability (and even corporate responsibility), and more about the perceived status increase of eating at Chipotle. My money would be on the latter: Chipotle works hard to provide its clients with settings that suggest upward mobility, much as Starbucks once did. That, plus the higher quality of food at Chipotle, would be what I would suggest sparked this shift in social attitudes.
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One way or another, does this spell the end for a brand that loomed over the 20th Century as the very symbol of the worst, most destructive, most ecocidal excesses of capitalism? I don’t know, but I’ll happily consider it over a Chipotle burrito.
Via Business Insider