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McDonald's CEO Reveals The Brand's 4 Biggest Problems

Don thompson mcdonald'sAP Photo/Yves Logghe

McDonald’s is struggling to get back on top.

The fast food giant reported Tuesday that global same-store sales dropped 3.3% in the third quarter.

The company has lost market share to fast-casual brands like Chipotle and better-burger restaurants like Five Guys.

In a recent call with investors and analysts, CEO Don Thompson revealed the four biggest issues facing the brand — and how he planned to fix them.

1. Offering the best value. McDonald’s spent several years experimenting with high-end items like Angus beef burgers and Chicken Selects. By focusing on this, McDonald’s ignored one of its biggest strengths.

“Value is one of our grand pillars,” Thompson said. “So we must continue to fortify our position within this key consumer attribute.”

The brand is luring back cash-strapped customers with offerings like the low-priced Jalapeno McDouble and Buffalo Ranch McChicken.

2. Customer service. McDonald’s drive-thru wait times have gotten worse over the years, in-part because of an increasingly complex menu. Thompson acknowledged this problem and said that the company was sending corporate representatives in for a “service reset.” This could include adding more workers and assigning new tasks to existing ones.

The company is also remodeling European kitchens for faster food assembly.

Mcdonald's big mac chinaREUTERS/Bobby YipCustomers walk up the stairs to a McDonald’s outlet, the first one which opened in China in 1990, at the southern Chinese city of Shenzhen neighbouring Hong Kong, March 18, 2013.

3. Marketing. Thompson is aware that many view McDonald’s as unhealthy junk food. This problem has been exacerbated by a food factory scandal in China. To improve public perception of the company, McDonald’s is doing a global audit of the marketing department. Thompson said he planned to make new internal hires.

“We are also strengthening our creative messages by placing greater emphasis on the quality of our food and again re-establishing the emotional connection that our customers associate with the McDonald’s experience,” Thompson said.

4. Simplifying the menu. McDonald’s menu has grown 70% since 2007. The new menu items are a burden on employees and have helped contribute to long wait times. Franchisees are also angry about the overloaded menu, saying that the extra ingredients and equipment were costing them money.

Thompson stressed that the restaurant was going back-to-basics.

“We are streamlining our merchandising menu board and product offerings and in addition to making it easier for customer to order their favourite products, this will reduce complexity in our restaurants which in turn should enhance accuracy and speed of service,” he said.

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