An example of an American company selling its wares by making them "un-American."

An example of an American company selling its wares by making them "un-American."

There'll Always Be a McEngland: How the U.S. fast-food chain made itself as British as the queen - MATTHEW GWYTHER, Wall Street Journal

London

In the fevered hours of July 22 before the British royal birth, the most-read story on many British news sites was the tale of a woman who had taken her horse into a McDonald's MCD -0.60% in the northwestern town of Bury. Refused service when she rode up to the drive-through window, the rider led the horse into the restaurant. According to a Greater Manchester Police spokesman, the horse then "ended up doing his business on the floor. The sight and smell of this caused obvious distress and upset to customers trying to eat, as well as staff members. Officers arrived at the location and the woman was issued a fixed penalty notice."

After stories of involuntary bodily functions, there is nothing the British public loves more than a McDonald's yarn. When the two are combined you have digital dynamite, and soon a nation is merrily clicking away.

McDonald's headquarters received dismaying news last month that the company's second-quarter sales in Europe declined 0.1%. But the U.K.—glad as ever not to fall in line with the Continent—maintained its unbridled hunger for Maccy D's, as the restaurants are often called: Second-quarter sales increased 3%.

Since its arrival in the U.K. in 1974, McDonald's has become part of the British social fabric and now has 1,200 restaurants. Profits have grown in Britain quarter on quarter for seven years, even through the depths of the recession. The company has done it thanks to a game-changing makeover.

McDonald's entered the U.K. nearly 40 years ago with the tag line "There's a difference at McDonald's you'll enjoy." This was a swipe at Wimpy—an aptly named, slightly down-at-heels Brit burger chain that dated from the mid-1950s. But the slick McDonald's razzmatazz with Ronald the clown larking around on TV screens was a rapid hit. The guys with the golden arches were soon the market leader, and still are, ahead of Johnny-come-lately Burger King.

All went well until the 2000s, when the British chattering class went to see Morgan Spurlock's film "Super Size Me" and read Eric Schlosser's gruesome page-turner "Fast Food Nation." Enthusiasm waned and a rebranding was called for. McDonald's U.K. began a subtle reverse Boston Tea Party, emphasizing its British identity. Menus were altered, the restaurants were made over in softer greens and purples, and the marketing became folksily Brit, complete with wholesome Northern accents.

The rethink has succeeded so well that few British youngsters under age 20 regard McDonald's as American. Last year the company opened its largest-ever restaurant, as Brit as the Union Jack, within the London Olympic Games park. That may explain why McDonald's was spared during the recent outbreak of righteous furor when it emerged that many American companies are paying next to nothing in corporation tax on their U.K. profits.

The British business is thoughtfully managed. It is praised by the government for a commitment to training, and the company receives a million job applications annually (one in 15 is hired). Where other fast-food providers, such as Taco Bell, have abandoned kids' meals after endless criticism, McDonald's in the U.K. gives away books instead of plastic toys that end up in the garbage after 15 minutes.

It hasn't all been plain sailing, and some lessons have been painfully learned. In the 1990s McDonald's unwisely became entangled in the notorious McLibel case, when it sued two unemployed vegetarian environmentalists who distributed a leaflet called "What's wrong with McDonald's: Everything they don't want you to know." The case dragged on for 20 years, the longest trial in English legal history at the end of which McDonald's declined to collect the damages awarded by the judge, £60,000, later reduced to £40,000.

But the company no longer seems to rile the British left the way it once did. Perhaps the realization has sunk in that during straitened economic times, many people—especially those on the lower end of the socioeconomic scale—welcome inexpensive, calorific belly-filling, no matter what the food-scolds say. The U.K. company's CEO, Jill McDonald, acknowledged recently: "We have seen a stronger trend around payday over the last nine to 12 months. People are finding that money is literally running out towards the end of the month."

The company also dodged potential PR disaster last winter when it emerged unscathed by a ruinous European scandal involving horse meat passed off as bovine. Reputations have suffered for many beef purveyors. In January, the "Everyday Value" beef burgers at Tesco, the nation's biggest supermarket chain, were revealed to contain 29% horse flesh. A typical joke: I went to a Tesco café yesterday and ordered a burger. They asked me if I wanted anything on it, and I said, "Yes—a fiver each way."

At McDonald's in the U.K., the only horse flesh you'll find is standing in line.

Mr. Gwyther is the editor of Management Today.