Why Macca’s is on a downward spiral

McDONALD’S is broken, and customers are #notlovin’it. Sales have plummeted, but there may be a way of buying the love back.

McDonald's Create Your Taste burger.

McDONALD’S — the hamburger restaurant that spans the globe — is in a tailspin.

Recent press has said the business is “facing its final days” and is “in a deep depression.”

In the United States, home of the burger, Mexican fast casual chain Chipotle was destroying McDonald’s, selling burritos and tacos that people perceive as healthy and more important — cool.

Chipotle’s stock price has risen over 200 per cent in the last five years — far faster than McDonald’s.

Things have been going wrong left and right. Global sales fell for the last part of 2013, and fell for the whole of 2014.

McDonald’s seemed to be throwing everything at the wall and seeing what stuck.

It launched all day breakfast and annoyed its franchisees. It launched fish nuggets in the United States and shortly afterwards cancelled them.

It introduced a new Ronald McDonald and social media went crazy with the hashtag #notlovin’it. They launched cage-free eggs and the egg farmers gave them a whack.

It gave its employees a raise and franchisees complained.

Sales fell again in January and February 2015. In March McDonalds sacked its CEO and got a new one. Sales continued to fall in April and May.

Not so tasty? Picture: iStock.

It came last in a survey of fast food restaurants for the American Customer Satisfaction Index. For a long time, Maccas was looking done for.

They say gold doesn’t tarnish but the Golden Arches were looking fairly rusty.

Maybe the brand wasn’t the precious thing we always thought? Maybe it was about to collapse?

But in the global McDonald’s business there was a glimmer of hope. There was one place that was still shining. One place taking risks and forging ahead with new ways of doing business.

One place that could — maybe — save the whole edifice. A little place called Australia.

In Australia, Maccas is a few steps ahead of the US. Maccas Australia has had its troubles here and worked on them.

The new TV ad campaign, “How very un McDonald’s” is a great example.

McDonalds has spent millions — nay, billions — building this brand. And now in Australia they’re slitting its throat in public.

Saying: “everything you thought we are — we are not.” That takes confidence that change is necessary.

Australia has always done Maccas differently. Giving it a nickname, for one thing.

We haven’t been afraid to make the brand our own and the local branch of the company has made that possible.

Australia was the launching place for McCafe. In Melbourne’s Swanston Street, in 1993, when espresso was still a fairly foreign concept.

That is now a global phenomenon that’s working for McDonalds.

In Sydney, there is a secret McDonald’s called The Corner, which looks a lot like a regular hipster cafe and trials new ideas to roll out elsewhere in the McDonald’s universe.

The Create Your Taste Menu was launched there too. Now it is going worldwide.

Partly that has happened because the market here is small enough to experiment on.

And partly because McDonald’s had to develop to keep up with Australia.

Almost 20 years ago, Australia changed. From 1982 to 1997 we consistently spent more on takeaway food than cafes and restaurants. Then, suddenly, we swapped.

Change in spending habits from 1982 — 2015. Picture: supplied.

Maccas needed to tap into that growth, so it stopped pushing out pre-made

burgers and tried to change.

I admit, I’ve been a bit anti-Maccas. Was a vegetarian for a bit. Didn’t go there for a few years in my twenties.

Except maybe after midnight when I was drunk to get those chips. Damn. Those chips.

What happened? I changed, and Maccas changed too. We sorted out our differences.

Not that I would eat there every week. Not even every month. But I wouldn’t object to going there now.

For research purposes, I went last Friday and used the new computer screens they have to make your own burger.

I was pretty surprised to find it started at $8.95 before I even added any toppings, and it was slow and at times confusing.

But, overall, the burger was tasty — and probably still cheaper than I could have got at

other places near my house.

Maccas is not perfect. They’re still not exactly healthy and have been accused of dodging half a billion in Aussie tax. They have plenty of room to change a lot more.

But all the experimentation done in Australia might be working.

Just last week, for the first time in years, comparable sales are up at McDonald’s both in the United States and worldwide.

McDonald’s sales are up for the first time in years. Picture: Supplied.

The brand seems to be back and the company is breathing a sigh of relief. You’re welcome, Maccas.

Jason Murphy is an economist. He publishes the blog Thomas The Think Engine. Follow him on Twitter @jasemurphy.