McDonald’s Chief Outlines Plan for Turnaround

CHICAGO (Chicago Tribune/TNS) -

McDonald’s acknowledged Wednesday that rivals have been better at responding to customers’ tastes and laid out the first steps it hopes will turn around its sales slump in the United States, including taking eight items off the menu.

Chief Executive Don Thompson and Mike Andres, President of McDonald’s USA, met with analysts and investors in Oak Brook, Ill., two days after the world’s largest restaurant company posted its worst monthly U.S. sales in more than 13 years.

Andres, who returned to McDonald’s in October, said McDonald’s plans to take eight items off of the U.S. menu, which is being updated next month. It also plans to cut the number of extra value meals to 11, from 16.

“The pace of change outside of McDonald’s has become faster than perhaps the pace of change internally,” Andres said during a short presentation on Wednesday morning.

Andres said that adding more than 100 items to the menu over the past decade helped increase sales, touting that the items added $770,000 to sales at an average restaurant. However, the more complex menu also made it difficult for restaurants to execute “and maybe difficult to order,” he said.

While eliminating some weaker-performing items, Andres pledged that McDonald’s would also offer food that is “more culinary inspired” and sell items with shorter ingredient lists and fresher ingredients.

“We are not going to re-energize this business by taking incremental steps,” Andres said.

McDonald’s worldwide same-restaurant sales declined 2.2 percent in November, the company reported Monday. The drop was its sixth consecutive monthly decline. The biggest drop came in the United States, where same-restaurant sales fell 4.6 percent, the steepest U.S. drop since June 2001. McDonald’s U.S. same-store sales have not increased since October 2013.