McDonald’s is shaking up its leadership as it struggles to keep up with changing consumer tastes, appointing Steve Easterbrook, a veteran of UK high street restaurant chains, to replace Don Thompson as chief executive.
Mr Thompson was appointed in 2012 after the ubiquitous burger brand had recorded 106 consecutive months of positive same-store sales growth in the US. He will retire after a rocky three years, culminating in last week’s news that it had reported its first annual drop in same-store sales in a dozen years.
Mr Easterbrook, a British former accountant, spent 18 years at the company before leaving in 2011 to become chief executive of PizzaExpress. He left that position after less than a year to run Japanese noodle restaurant chain Wagamama, which he left in 2013 to return to McDonald’s. He will become president, chief executive and a member of the board.
Mr Thompson, a 25-year McDonald’s veteran and its first African-American chief executive, pledged in October that the company would “take decisive action to fundamentally change” after yet another disappointing quarter. He will retire on March 1.
Like many traditional fast-food retailers, McDonald’s has seen sales slump as its core low-income customers struggle to recover from the global financial crisis. Under Mr Thompson’s leadership the company has come under fire for adding too many items to its menu of Big Macs and Quarter Pounders, which has slowed down service and confused diners. But the Illinois-based company has also been at the mercy of more fundamental shifts in the restaurant industry, which seemed to accelerate just as Mr Thompson took the reins.
Consumers are increasingly opting for brands whose food is perceived as healthier and made with fresher ingredients, such as Chipotle, the burrito chain whose explosive growth in recent years stands in stark contrast to McDonald’s, once a majority shareholder. It has also been threatened by upmarket burger chains including Five Guys and Shake Shack.
Don Thompson, president and chief executive officer of McDonald’s Corp., laughs during a Bloomberg Television interview at McDonald’s headquarters in Oak Brook, Illinois, U.S., on Wednesday, July 24, 2013. Thompson said the company is an "above minimum-wage employer" and will continue to provide entry-level jobs.
“It’s tough to say goodbye to the McFamily, but there is a time and season for everything,” Mr Thompson said. “I am truly confident as I pass the reins over to Steve, that he will continue to move our business and brand forward.”
Mr Easterbrook, a former president of McDonald’s Europe, has been chief brand officer since 2013, where he has been charged with overseeing marketing and menu Innovation, two areas where the company has been criticised. “I am honoured to lead this great brand, and am committed to working with our franchisees, suppliers and employees to drive forward our strategic business priorities to better serve our customers,” he said. It’s tough to say goodbye to the McFamily, but there is a time and season for everything.
As part of the management changes, Kevin Fuller, who currently serves as corporate controller, has been named the new chief financial officer.
While slipping sales in the US have become common in recent years, the 1 per cent drop in global same-store sales in 2014 highlighted the international nature of the challenges facing McDonald’s, particularly in China, Japan, Russia and Germany. The company responded by slashing its new restaurant budget by $800m.
(Source: Financial Times)