McDonald’s Turns ‘Progressive’: Note for a lecture, "E Pluribus Unum? What Keeps the United States United"

New York Times
APRIL 8, 2015
Mark Bittman

You could almost feel sorry for McDonald’s. That’s an odd sentiment when you
consider that the company’s revenues in 2014 were $27.4 billion and its stock
price makes it worth something like $92 billion. It’s among the world’s most
valuable brands and has three times the United States market share of
Subway, its nearest competitor.

Enviable. Yet for years its new products, business ventures, even social
media attempts have gone wrong: It sold a 90 percent share in Chipotle, now
one of its strongest competitors; it introduced products like chicken wings,
which went nowhere; it created a Twitter hashtag, #McDStories, that turned
into a bashing event. And it has spectacularly failed to attract or even hold on
to millennial customers, who’ve fled in droves.

Meanwhile, it’s the most visible target of an alliance of workers fighting
for $15 an hour (most McDonald’s workers make slightly more than the
federal minimum wage, $7.25, but it varies by state), and its food is seen as
anything but sustainable, fresh or healthy. A result has been a decline that
includes a whopping 15 percent drop in its United States operating income in
the last quarter of 2014.

The company is losing customers to higher­end burger chains like Shake
Shack and Five Guys, to small but intriguing start­ups that makes locally
ourced, slow food appealing, like Dig Inn, to Chick­fil­A (around $5 billion in
sales in 2013) and, of course, to Chipotle, which has sales in the $4 billion
range.

McDonald’s can’t get a break. In the last two months, the company has
made several well­publicized big announcements that were widely greeted
with yawns or jeers.

The first was a decision to phase out chickens raised using antibiotics
meant to treat humans. The second was to unilaterally raise the salaries of
those minimum­wage workers the company directly employs by at least a
dollar an hour, granting a small amount of paid vacation time to company
employees and financial assistance for education to all workers in its system.
And the third was to begin referring to itself as a “modern, progressive burger
company.”

Is it too little, too late? Recall Polaroid trying to manage digital
photography or BlackBerry struggling to recover after being devastated by the
iPhone. Once again, an entrenched company has sat back while nimbler, more
with­it others ate its lunch. Many of the new fast­food chains are paying
workers better, sourcing sustainable ingredients, creating different forms of
fast food and even making better burgers. Now McDonald’s is trying to play
catch­up.

But it’s using half measures, and that’s the problem. It’s not like the
competition is going to go away, and the brand may be permanently tarnished.
Fixing that isn’t going to be easy, and it’s not even clear whether it’s possible.
What McDonald’s should do is go all in and really transform itself,
because the effect of positive change would be immeasurable. Instead it tries
to play it both ways, controlling what franchisees buy and sell but insisting
that it cannot dictate how they treat employees. Thus the wage increase
touches only around 11 percent of the chain’s workers, and workers
immediately decried it as inadequate. (Even Walmart did better.) No one turns
down a raise, but this one virtually guarantees that most of the company’s
workers will remain eligible for food stamps, thus perpetuating the public
subsidy for McDonald’s labor force.

hat the nonantibiotic move has taken this long (Chipotle has tried to be
antibiotic­free for more than a decade, as has Panera) and is so incomplete —
that is, there’s no word about pork or beef, and the move is being phased in —
also seems pathetic. (Even more pathetic is the refusal of the Food and Drug
Administration to mandate the removal of nonmedicinal antibiotics from
animal production, but that’s another story.)

These moves demonstrate that McDonald’s is hardly a “progressive”
company but one that is merely trying in a halfhearted way to catch up with
changing market norms and to anticipate inevitable regulation.
If McDonald’s were truly progressive, what would it do? It might revamp
the menu in favor of sustainably sourced and fresher food (it’s worth noting
that in Britain, McDonald’s uses free­range eggs and organic milk), and might
increase its workers’ wages (and hours) to something approaching a living
wage.

It may be that the biggest beneficiary of McDonald’s recent moves is the
food movement, which, smelling blood, continues to apply pressure. (In
response to the raise, some demonstrating workers chanted: “Hey
McDonald’s, let’s be blunt/This is just a P.R. stunt.”) And that movement
continues to gain credibility as it attends more to the rights of humans than
those of animals — not that animals don’t matter, but it’s all relative.
It’s great that McDonald’s blinked. I’d love to see it become a truly
progressive company — I’d even help them if I could — but if that’s not in the
cards, it would be fine to see a continuing decline in its business. Either would
be a satisfactory ending to the McDonald’s story.