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McDonald’s works on new turnaround plan to boost profit, sales

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Restaurant chain McDonald’s Corp is working on a new turnaround plan in order to boost its profits and improve sales as the company is struggling hard to regain its position in the highly competitive fast food market.

The company’s shares by sales increased 3.8 percent to USD 98.38 in early trading on Wednesday.

Under new Chief Executive Steve Easterbrook, the global comparable sales of McDonald’s at restaurants open at least 13 months dropped 2.3 percent in the first quarter that ended March 31.

Releasing a statement, the company said that the CEO will be sharing preliminary details of the turnaround plan on May 4.

Mark Kalinowski, an analyst at Janney Montgomery Scott, said, “Folks hoping for a near-term rise in the stock may be hanging their hat on hopes that McDonald’s can spark some pizzazz in investors that day.”

The company is making enough efforts to recover from food scandals in Japan and China. Moreover, it is facing tough competition at the home market in the US from various nimble chains ranging from Burger King to Chipotle Mexican Grill Inc.

McDonald’s promotions in the United States failed to attract the customers in its latest quarter. The US comparable sales dropped 2.6 percent.

The analysts on average have made estimates of a 1.8 percent decline in the global same-store sales of the company and a 2.1 percent drop in the US.

McDonald’s said that its global comparable sales for April are expected to be negative.

 

McDonald’s Corp.’s pay-raise decision invites ire from labor organizers

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Fast food chain McDonald’s Corp.’s decision of hiking the wages of only workers at the company-owned stores, excluding the employees at franchises, has invited fresh protests from the labor organizers.

The displeased labor organizers on Thursday launched nationwide protests against the company’s new policy on wage hike in which workers employed at the franchises were kept aloof.

The demonstrations are part of an ongoing series of actions that have been designed in order to impose pressure on the companies for embracing a minimum wage of USD 15 per hour and allow the workers to form unions without any fear of retaliation.

Kendall Fells, organizing director of advocacy group Fast Food Forward, said, “This move happened for one reason as workers joined together and went on strike. And workers will continue joining together and going on strike until McDonald’s responds with more than a publicity stunt.”

The planners said that the employees across dozens of cities including Detroit, New York, Los Angeles and Las Vegas will be rallying in a bid to criticize the company’s move, which has been termed by some as a ‘disingenuous strategy’.

Oak Brook-based McDonald’s on Wednesday announced its new wage policy, saying it would begin paying the American workers at least a US dollar more than the local minimum wage at the corporate restaurants beginning in July.

The new wage plan of the fast-food giant is very much similar to the recently announced hikes in salary from big retailers like Target Corp. and Wal-Mart Stores Inc.

Nearly 90 percent of the 14,000 American locations of McDonald’s are owned by franchisees.

The labor organizers said that their plan is to stage a massive strike across 200 cities on April 15.

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