Mcdonald's Corp

[greengiraffe]

MacDonald is an interesting company, the core is F&B, but probably the most profitable segment is property investment. The original game plan is to own, rather than to rent the properties, to supplement its F&B biz.

Let me OT a bit, With a similar strategy, will Sheng Siong face the same "problem" as MacDonald with a "vast real estates holdings", many years down the road?   

(not vested in MacDonald, but vested in Sheng Siong)

I think in the scenario if Sheng Siong is to face future problems in terms of generating enough growth, a more appropriate company to benchmark will be SEARS Holdings? My understanding is that SEARS holdings has tremendous land holdings but a declining retail performance, which might be similar to Sheng Siong.

Not an expert on this, but will like to learn more from buddies here who know more.

When that happens then most likely growth would have peaked and necessitate the need for financial engineering

[weijian]

McDonald's sets new welfare standards for chickens

CHICAGO (Reuters) - McDonald’s Corp will require suppliers to follow new standards for raising and slaughtering chickens served in its restaurants, the company said on Friday, the latest changes affecting popular menu items like McNuggets.

https://www.reuters.com/article/us-mcdon...SKBN1CW2IL

[specuvestor]

The builders of a $22 billion burrito empire—the founder, his father, his college buddies, key execs, and a couple of pig farmers—open up about how they won the fast-food future. And yes, they dish about McDonald's.

http://www.bloomberg.com/graphics/2015-c...cda68d6b84

A good sharing of article. I moved the post to McDonald thread, as a threat to Mcdonald's Corp.

Thanks

Regards
Moderator

It is quite amusing to read the stories of what I call "big-mouth hubris" (which incidentally VBs know includes Ackman)... Including the so many trumpeted "next Buffetts". But one has to usually wait patiently a few years to enjoy the last laugh

Mayb Bitcoin will take a bit longer...

[cyclone]

If you invested $1,000 in McDonald’s 10 years ago, here’s how much money you’d have now

Anna Hecht
Published Wed, Sep 25 2019  2:00 PM EDT

McDonald’s has recently upped its drive-thru tech, taken a stance on harassment in the workplace and partnered with delivery service GrubHub. As the company continues to reinvent itself, not only is it good for business, but it’s also proven to be a positive for longtime shareholders.

If you invested in McDonald’s 10 years ago, that decision would have paid off. A $1,000 investment in 2009 would be worth more than $5,000 as of Sept. 20, 2019, for a total return of around 400%, according to CNBC calculations. In the same time frame, by comparison, the S&P 500 earned a total return of nearly 250%. The fast-food giant, which went public in 1965, has a current share price around $212.

While McDonald’s stock has done well over the years, any individual stock can over- or underperform and past returns do not predict future results.


CNBC: McDonald’s stock as of September.

How McDonald’s reinvents its brand

Although the company has been around for decades, McDonald’s continues to innovate. To enhance its drive-thru experience, the company recently agreed to acquire Apprente, a Silicon Valley-based artificial intelligence company. In March, it began installing technology from Dynamic Yield, another recent acquisition, into more than 8,000 drive-thru machines around the U.S. The machine learning tech allows menus to change based on the time of day, restaurant traffic, weather and the customer’s order.

That isn’t the first time McDonald’s has given stores a tech revamp: In June 2018, the burger chain began adding self-order kiosks at 1,000 restaurants per quarter.

When it comes to delivery service, McDonald’s recently partnered with GrubHub and its sister brand Seamless to offer delivery from around 500 locations in New York City and the tri-state area. McDonald’s has its eyes set on making delivery a $4 billion business this year.

The burger chain is also taking steps to mitigate its environmental impact: Last week, McDonald’s announced that select locations in the U.K. and Ireland will test out giving kids the option to choose a fruit pack rather than a plastic toy when ordering a Happy Meal. And early next year, it plans to introduce books in place of its traditional children’s meal toys, Reuters reports.

Its decision to test no-toy meals comes in response to criticism it received earlier this year over the distribution of plastic toys. In Britain, two young girls, Ella and Caitlin McEwan, first created a Change.org petition eight months ago calling for McDonald’s and one of its biggest rivals, Burger King, to stop giving out plastic toys in order to protect the environment. The petition has received more than 550,000 signatures and counting.

The future of McDonald’s

Many consumers wonder if McDonald’s will join its competitors in adding meatless options to its lineup. But the answer is still up in the air: In May, McDonald’s CEO Steve Easterbrook said on CNBC’s “Squawk on the Street” that he needs to know whether adding plant-based options will be good for business before doing so.

More details in https://www.cnbc.com/2019/09/25/what-a-1...years.html

[cyclone]

McDonald’s fires CEO Steve Easterbrook for violating policy over relationship with employee
* McDonald’s said Sunday that it has fired Chief Executive Steve Easterbrook for violating company policy by having a consensual relationship with an employee.
* McDonald’s did not provide other details on the relationship. The company said Easterbrook would be replaced by USA President Chris Kempczinski, effective immediately.
* “This was a mistake,” Easterbrook wrote in an email. “Given the values of the company, I agree with the board that it is time for me to move on.”

Emma Newburger & Amelia Lucas
PUBLISHED SUN, NOV 3 20194:39 PM EST
UPDATED SUN, NOV 3 20197:56 PM EST

McDonald’s said Sunday that it has fired Chief Executive Steve Easterbrook for violating company policy by having a consensual relationship with an employee.

The company said in a release that the board determined Easterbrook “demonstrated poor judgment” by engaging in the relationship.

McDonald’s did not provide other details on the relationship. The company said Easterbrook would be replaced by USA President Chris Kempczinski, 51, effective immediately.

“This was a mistake,” Easterbrook wrote in an email to employees. “Given the values of the company, I agree with the board that it is time for me to move on.”

Easterbrook, 52, became CEO of McDonald’s in 2015. Before then, he was chief brand officer of McDonald’s and its former head in the U.K. and northern Europe.

Working closely with Kempczinski, Easterbrook oversaw a turnaround of the company. McDonald’s shares have risen 96% to $193.94 since Easterbrook took over as CEO in 2015.

“I am excited to take the reins of this incredible company and grateful for the Board’s confidence in me,” Kempczinski wrote in an email to employees. “I am particularly fortunate to be surrounded by such a talented team as we take this brand into the future.”

Joe Erlinger, president of the international operated markets, will take over as head of McDonald’s U.S. division, overseeing the chain’s 14,000 restaurants in its domestic market. Prior to his current role, Erlinger led McDonald’s high growth markets division.

Under Easterbrook, the company sold off many of its company-owned stores to franchisees. More than 90% of McDonald’s locations are now owned by franchisees. The refranchising strategy helps McDonald’s profits but has led to falling revenues as a result of accounting differences.

In the early days of the turnaround, value meals and the launch of all-day breakfast lifted sales and traffic. But the company’s third-quarter earnings fell short of estimates for the first time in two years, as its latest batch of promotions failed to gain traction with U.S. consumers.  

Under Easterbrook and Kempczinski’s leadership, McDonald’s has been renovating U.S. restaurants with upgrades like self-order kiosks and digital menu boards. The fast-food chain has struggled in the U.S. in recent years with declining traffic, but technology upgrades often lead customers to spend more.

However, U.S. franchisees have balked at the expensive renovations, leading them to create an independent franchisee group last year.

The company has also come under fire from its workers for how it handles sexual harassment in its restaurants.

More details in https://www.cnbc.com/2019/11/03/mcdonald...loyee.html

[weijian]

Besides cost inflation, the fast food industry is increasingly dealing with headwinds coming from a health conscious population + adoption of GLP-1 drugs. Burger King is undergoing its own transformation by re-engineering their Whopper burger, contrast this to McD who are engineering their menu instead.

Inside McDonald’s push to have AI price its menus

McDonald’s pricing engine uses machine-learning algorithms to continually analyse data from millions of daily transactions across McDonald’s nearly 14,000 restaurants and generate what the company calls “the optimal price” at each location for each menu item, from Big Macs to discounted coffee for seniors.

A Reuters check of prices in September on the McDonald’s mobile app showed price differences. For example, a company-run store in Fresno, California sells a Big Mac for US$5.69, but another company-run restaurant two miles away sells the same sandwich for US$6.89, a 21 per cent premium. Reuters could not confirm if the price difference is the result of the price engine’s recommendations or other factors.

McDonald’s says its franchisees are free to set their own prices, but five store owners told Reuters the company pressured them to use the AI-pricing tools.

A franchisee document from June reviewed by Reuters shows McDonald’s records franchisees’ deviations from the recommendations in detail.

In a meeting with investors on Wednesday, McDonald's said its "industry-leading" pricing engine was important to a larger corporate bet on affordability, and that franchisees see the need for inexpensive menu items to lure low-income consumers.

https://www.channelnewsasia.com/business...ee-6419791