An almost half century of growth is good by any count – and as McDonald’s is learning this week, all good things must come to an end.
According to reporting by the Associated Press, Mickey D’s march of super-sizing at home and abroad is stopping as the ubiquitous fast food chain is shrinking the number of its U.S. stores. That hasn’t happened since at least 1970, the AP reported after reviews McDonald’s regulatory filings.
McDonald’s spokeswoman Becca Hary said the reduction would be “minimal” compared with its total of about 14,300 U.S. locations.
And while the changes may be small – market watcher are wondering if this is the unfortunate shape of things to come for a company that has been living large on consistently qualities food at low prices. McDonald’s even made money during the recession with offerings like the Dollar Menu and new products like McCafe coffee drove up sales.
But since then, chains like Chipotle that market themselves as serving better food and ingredients have chipped away at McDonald’s dominance. A new breed of “better burger” chains such as Five Guys Burgers and Fries is taking away customers, too.
But then Chipotle came to town and inexplicably changed the food lives of people ever where – as well as the “next generation” burger places like Five Guys and The Shake Shack.
“McDonald’s is such an internally focused organization, it’s a situation where you don’t have a fresh perspective coming in,” said John Gordon, a restaurant industry analyst with Pacific Management Consulting Group.
McDonald’s executives have also noted that perhaps the menu is a little too complex.
The U.S. store closings will be a mix of franchised and company-owned locations, Hary said.
The company declined to comment on the last time it reduced its U.S. store base, however some have speculated this might literally be a first since the first kicked was developed by Ray Kroc in the 1950’s.
Mike Donahue, who served as McDonald’s chief communications officer before leaving in 2006, said McDonald’s hasn’t necessarily reached its limit in the U.S.
“The only thing that stops growth is relevancy to the customer,” said Donahue.
McDonald’s easily remains the country’s biggest hamburger chain and outpaces its nearest rival Burger King with twice as many restaurants according to the industry tracker Technomic.