Just yesterday McDonald’s new CEO Steve Easterbrook claimed that he was in the midst of developing a turnaround plan for the once unstoppable fast food force. However, it appears his ideas on how to reverse sagging sales and criticism of labor practices comes a bit too late for about 700 locations that have already closed or are slated for closing this year.
Fortune reports that the Golden Arches shuttered 350 poorly performing stores in the U.S., Japan and China in the first part of 2015. Those stores are in addition to 350 other stores that were already targeted for shutdown in the first three months of the year.
McDonald’s CFO Kevin Ozan told analysts on Wednesday that these shuttered restaurants were chosen after comparable sales for the locations fell between 2.3% and 4.8% in the first quarter of the year.
Although the closure of 700 stores seems like a lot, it’s only a small fraction of McDonald’s 32,500 stores worldwide.
Analysts tell Fortune that the unexpected closures signify one way in which McDonald’s is attempting to aggressively address slumping sales.
McDonald’s announced Wednesday that same-store sales were down 2.6% in the first quarter, despite the company’s massive media push with its “lovin’” campaign, which briefly allowed random customers to pay with non-currency like hugs. The marketing, which included prominent Super Bowl advertising, increased brand awareness of McDonald’s but failed to improve sales or consumers’ feelings toward the company.
Other measures to bring the company back to its glory days included a Turnaround summit that some franchisees called a farce, and recently announced pay hikes for employees at certain company-owned stores.
Still, as Consumerist reported Wednesday, Easterbrook will provide actual details on new plans to turnaround the fast foot giant during a May 4 strategy call.
McDonald’s is closing hundreds of stores this year [Fortune]
by Ashlee Kieler via Consumerist
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