In a previous post, I quickly noted the difference between fairly classy foreign McDonald’s, and the fairly grotesque US versions. Obviously, I was not the only one to observe the inequalities as McDonald’s has launched a $1 billion campaign to overhaul its US restaurants. You can read more about the plan here, but I want to weight in on it myself.
Ostensibly, the plan is for McDonald’s to compete with Starbucks by creating a modern, lounge-y environment for people to hang out and drink a McCafe beverage.
However, as Seth Meyer’s on Weekend Update put it, “… people don’t hang out at McDonalds they end up at McDonalds.”
The plan will introduce things like wooden tables, flat screens and a modern design scheme. Basically…they are gonna make it look like European McDonald’s.
this is what they want back home
I can see their logic. Six years ago, the European golden arches were tanking. So, the higher-ups overseas upgraded their restaurants. Now, the European MickeyD’s is outstripping the US side in growth and profits. In fact, the swankier European restaurants are set to introduce touch screen/computer ordering systems. I’m not gonna lie… I’ve been known to frequent our local McCafe for a midday cappuccino.
Nevertheless, I think that the American side has a far more challenging battle ahead of it if it hopes to compete with Starbucks.
As I’ve thought about it I feel like there are several roadblocks to be considered:
1. The Image
Kids are now being taught that Ronald McDonald is the leader of an evil empire trying to poison their bodies. Sustaining such (deserved) vilification in recent documentaries, books and TV shows, it’s difficult to see the restaurant making friends with the younger crowd who sit around in coffee shops. They are going to have to really hammer home their commitment to the Rainforest Alliance, and other ‘feel good’ causes.
The other issue is that for the average American, there is already this perception that McDonald’s is pretty low on the food chain. That doesn’t mean that the average American won’t stop in for a cheap and filling meal, but it does work against this concept of a “high-class” coffee bar. Most people when speaking about a meal at McDonald’s do so with the requisite look of shame.
2. The Clientele
Even if you upgrade the image, it’s still going to take awhile to coax the Starbucks customer over. I don’t know about you, but I don’t want to sip on a latte while my eyes are being assaulted by overweight, overeating regulars. In Europe, you still won’t see nearly as many overweight people hanging around. I know it’s harsh, but seeing obese people stuff big macs into their faces really destroys my appetite and comfort level.
3. The Employees
This is delicate territory, but I will try not to offend. Employees are an important component of brand perception. When you are overseas, you will notice that many of the employees in fast food outlets are teenagers, and other young adults. The same sort who might work as baristas at Starbucks. I can only speak for Southern California, but back home that is not the case. Most high school students would never consider working at fast food unless it’s at In-n-Out. There is a prevalent stigma about fast food work suggesting that it’s degrading, and “beneath” the average Joe. This is exacerbated in a place like California where many fast food jobs are held by minorities. I believe that minority workers perform their jobs very competently, but let’s not pretend that the average American is free of prejudice. That prejudice devalues the workers, and also their workplace. Admittedly, the difficult economic situation has seen an increase in middle class citizens seeking out fast food jobs, but I don’t see this substantially changing the public outlook.
Yes, the European market saw excellent growth after their upgrade. However the Euroside hasn’t nearly the number of competitors the US has. Not only does McDonald’s have to compete with the myriad of other (more delicious) fast food chains, but now it’s looking to compete with all the coffee chains out there. I just don’t know if that’s smart or possible.
So I dunno. This could work out really well…or it could be a tremendous waste of $1 billion. What do you guys think? Will it work in the states? Where do you get your caffeine fix?