Mc Donald’s CEO Retires As Sales Decline
McDonald’s has just finished one of its toughest years in decade and is grappling to flip its awful sales around. And who would have thought that Mc D would finally hold someone responsible for it and that too, their CEO and President, Don Thompson? Don has just announced his retirement a day earlier. We don’t know how voluntary this announcement was, but what we do know is that Don joined when the stock was at $89 and is retiring as the stock closes at $89.
Take a look at the sales below.
Anyone who understands charts can see the tumultuous sales that the restaurant chain has been having. Sales fell 2% and earnings dropped 15% last year. And still McDonald’s warns that the first half of 2015 could be bleak.
Don Thompson has worked for 25-years with the company, having started as an electrical engineer and then climbing the corporate ladder all the way to the CEO for the last two years. Don Thompson, currently 51, was the first African-American to head the company since 1955, when it was founded. Steve Easterbrook will be replacing him effective from March 1st. Steve is a senior executive who has been with McDonald’s since 1993 and has also served as the president of McDonald’s Europe. Steve Easterbrook, 48-year-old, will be the second non-American CEO of McDonald’s (after Australian-born Charlie Bell in 2004). He has been touted to possess a high tolerance for risk and new ideas that might very well be what the flailing company needs right now. Many have also credited him with reviving McDonald’s British business after he ran it in the last decade.
Steve Easterbrook is an accountant by training. He became the chief executive of McDonald’s U.K. in 2006, when the brand was grappling with the public’s notion of unhealthy food and low-wage jobs. In the year that he was appointed as head of McDonald’s in Europe in 2008, sales rose 10 percent.
Now, the company faces strong competition due to the surge of fast-casual restaurants like Chipotle (Chipotle Mexican Grill), Culvers, Zaxby’s and Panera Bread. Also, strings of food safety scares across the chains didn’t help either. A tainted meat scandal in China, Hong Kong, and Japan; plastic pieces found in chicken nuggets in Japan, leading the company to pull the nuggets. In July, a Consumer Reports survey listed McDonald’s burgers the worst in America, ranking two spots below those of arch nemesis Burger King.
Mc D decided to cut its annual construction budget to the lowest in more than half a decade as it opens fewer restaurants in struggling markets. Despite all the setbacks, McDonald’s still rests atop the fast food throne, having over 36,000 locations worldwide and serving some 69 million customers in more than 110 countries each day. McDonald’s has announced the removal of 8 items from their menu to make way for “future food innovations”. It is expected that a stronger emphasis would be on healthier, fresher foods; a direction in which every other food brand is headed, including Mc D.
What the stock holders and investors are hoping for is an upward push to the shares. After the announcement from the company, the shares did witness a 3% soar in after-market trading on Wednesday. Will Steve manage to rein in the collapsing chain? Well, let’s hope he does that, for his own sake. The way it is now, Mc Donald’s in a tight spot unprecedented in the restaurant’s own history. And it would need pretty drastic measures to get it out of it. Let’s see what future awaits Mc Donald’s henceforth.