By Julie Jargon
Steve Easterbrook has made several big announcements in his
first two months as chief executive of McDonald's Corp. But on
Wednesday he said the success of his plan to revive the fast-food
giant will hinge on many small things--like how its restaurants
cook burgers and buns.
Offering new details of the turnaround at an investor conference
in New York, Mr. Easterbrook and Chief Administrative Officer Pete
Bensen said McDonald's is toasting its buns longer and changing the
way it sears its beef so that its hamburger patties are juicier.
Restaurant operators also will build more side-by-side
drive-through lanes to speed up service, and they will train
employees to increase the accuracy of orders.
But investors will have to wait until the end of each quarter to
determine whether those changes are making an impact, as McDonald's
also said Wednesday that it plans to stop disclosing monthly sales
figures beginning July 1.
The company has been struggling in its critical U.S. market,
where Mr. Easterbrook said it has failed to keep pace with shifting
consumer tastes. He has rolled out several major initiatives,
including structural changes aimed at reorganizing the business
along geographic lines, selling more company-owned restaurants to
franchisees and eliminating management layers.
Mr. Bensen said at Wednesday's conference that customers
increasingly expect higher-quality food, but McDonald's can't stray
too far from its roots, since 40% of sales come from such core menu
items as Big Macs and Chicken McNuggets.
Still, he added, McDonald's can improve the quality of food for
which it is known. Mr. Bensen said the milk in its children's Happy
Meals will be free of artificial growth hormones starting this
summer. That follows other moves to appeal to consumers seeking
options perceived as healthier. In March, McDonald's said it would
stop selling chicken in the U.S. made from birds raised with
antibiotics that are important to human health.
"Some of the challenges we've had in the U.S. have been somewhat
self-inflicted," Mr. Easterbrook said, explaining that the company
must provide better value offerings and a simpler menu.
The Oak Brook, Ill., company plans to offer a new value
promotion this summer, but didn't disclose details. The company
also plans to launch a mobile app later this year, and the data
McDonald's will be able to collect from it will help the company
better understand its customers, Mr. Easterbrook said.
Some analysts have speculated about whether McDonald's should
spin off its vast real-estate holdings into a real-estate
investment trust, or REIT.
"It is something we continually look at," Mr. Bensen said during
the conference, adding that "this would be a complete structural
redo of the business model."
Mr. Bensen said tax laws wouldn't allow the company's world-wide
properties to be structured in a REIT.
"There's no such thing as a global REIT," he said, explaining
that such a possibility would only apply to the U.S. market.
Write to Julie Jargon at julie.jargon@wsj.com
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