We may be in the midst of an obesity crisis, but it is doing little to curb British consumers' appetite for McDonald's. In 2007, the world's biggest burger chain recorded its best sales for 10 years, leaving its UK balance sheet looking even healthier than that in its homeland. More than 88m visits were made to McDonald's UK branches in December 2007, up nearly 10m year on year, and an additional 320,000 customers visited its 1200 high-street restaurants and drive-throughs.
To describe this as a turnaround is an understatement; just three years ago, the fast-food chain's global profits fell by almost two-thirds, from £96.6m to £36.9m. Leading the revival in the UK is chief executive Steve Easterbrook, who joined the company in 2006. He wasted no time in luring Jill McDonald from her role as head of global marketing at British Airways to become its senior vice-president and chief marketing officer, UK and Northern Europe.
When Marketing meets McDonald, she is fresh from one of her first TV interviews, on BBC News 24, something that would never have happened during the fast-food chain's dark days. 'There were issues that I wanted to make sure I had got
my head around and had the right breadth of knowledge to discuss,' she says. 'Although my accountability is marketing, as one of the senior team I have a collective responsibility across the business.'
Parental approval
A camera-friendly mother of two young sons, the brand certainly gets good value from McDonald. But there is plenty of substance to the 43-year-old, who worked her way up through the BA ranks having started there as a brand manager. She contends that despite operating in different sectors, her current and past employers have similarities. 'They are both big global brands, where there is a focus on service delivery. A lot of people stay at BA and McDonald's for a long time,' she says.
McDonald agreed to the job at the fast-food chain only once she was satisfied with its policy on marketing to children. 'We spent a lot of time talking to parents and conducting proper qualitative sessions with parents. It is such a complex issue, it was vital to get under the skin of it,' she says.
As a result of this consultative work, McDonald's decided to extend its tie-ups with film franchises such as Shrek to its fruit and vegetable offerings. This resulted in sales growth of up to 40% on some items. 'It felt like the right thing to do', says McDonald. 'I've got a fussy five-year-old so I know what a nightmare it can be to get them to eat more fruit and vegetables,' she adds.
Cynics will no doubt dismiss her personal approach to the issue as spin, but, if it is an act, it is a convincing one. She certainly seems to practise what she preaches, explaining that her sons eat at what they refer to as 'mummy's restaurant' about twice a week.
McDonald is undoubtedly down to earth and not the sort of person to simply parrot the company line; at one point she borrows the brand strapline 'I'm lovin' it', to describe how the job is going, but flashes a knowing smile while doing so.
Although the brand's image has taken a significant battering over the past decade, McDonald's is now in a far healthier place. There is no doubt that the home of the Big Mac still offers plenty of burgers to choose from and these still account for 90% of its sales, but a glance at the menu also reveals a range of deli sandwiches, fruit bags, organic milk, bagels and Rainforest Alliance coffee.
Moreover, last year 140 stores were given a facelift, with 200 scheduled to receive similar treatment this year. The roll-out of free wi-fi in its branches has further modernised the chain. A testament to its new-found confidence is that it has begun increasing restaurant numbers again, following the painful closure programme on which it embarked two years ago.
The fast-food company's attitude has changed, too. Gone is the arrogance and guardedness of yesteryear; in its place is an attempt to be more transparent. This is typified by the creation of makeupyourownmind.co.uk, which, since the site's launch in 2006, has attracted 680,000 visitors and fielded 14,000 questions about McDonald's. Although the company has faced criticism that the answers given are bland and generic, it claims its research shows that 70% of mothers felt more positive about the beef it uses in its burgers after visiting the site, while 80% felt they were better informed.
McDonald is bullish about the approach the brand has taken. 'We learnt that we had to be more open and transparent as an organisation. We have got nothing to hide and we want to have the debate with our detractors as well as the customers,' she asserts.
Multi-faceted approach
McDonald's role at the company is a layered one that goes beyond the brand and its reputation. As well as leading the revamp of its outlets, her job includes food development.
The chain's offering is now focused on three tiers - the value end, which includes the Pound Saver menu, comprising core favourites such as the bacon cheeseburger; more premium items such as recently introduced Chicken Legend; and the return to the menu of the limited-edition deluxe burger as well as a fresh chicken variant.
McDonald believes that a similar combination of factors has fuelled the recent success of the fast-food chain. 'It feels like there is a real coming together of the fundamentals,' she says. 'That is the menu, the delivery of service, the look and feel of the restaurants and the extension of opening hours, alongside effective promotional activity.'
The McDonald's brand is iconic and controversial in equal measure. Whether it is concerns over globalisation or just plain snobbishness, it will always have its hardened detractors. In addition, the heightened fears over obesity have given its critics a gilt-edged opportunity to attack it further.
Nonetheless, if UK consumers continue to stream through the Golden Arches, McDonald and her team will continue smiling. The challenge now, in the face of an uncertain economic future and in the light of its disappointing US performance, is to keep up the momentum during the coming year.
Case Study: The battle for breakfast
First it was burgers. Then deli wraps and salads. Now, the battleground for fast food is breakfast. McDonald's break-fast sales grew by 10% last year, while coffee leapt 22%.
'We saw an opportunity, given the price of coffee in other places,' says McDonald.
McDonald's first major promotion of the year involved a 'return to quality' in its breakfast with the introduction of free coffee mugs, and a switch to using back bacon and better-quality bread. In the US, Starbucks has responded by trialling a bottomless $1 cup of coffee to prevent customers turning to the Golden Arches.
Rivals Burger King and Subway have both revamped their breakfast menus, but JD Wetherspoons has returned the most impressive performance. Now that its pubs open from 9am, the chain is selling about 1m breakfasts each month, illustrating the gains to be made.
According to research by Sandelman & Associates, 10% of all fast-food sales are currently generated at breakfast.