Thursday, July 25, 2013

McDonald’s CEO to BTV: Wish I Had A Financial Plan Like We Have; Blame Parents For Obesity Problems

McDonald’s Corp. President and CEO, Donald Thompson sat down with Bloomberg Television’s Betty Liu live from McDonald’s headquarters in Oak Brook, IL this morning to discuss earnings, expansion struggles in China and Europe, whether management is out of touch with minimum wage workers, on whether McDonald’s after midnight will expand nationally, and what he really things about parents who are pointing their fingers at McDonald’s as the cause of America’s obesity problems.

 China is a growth market: http://www.bloomberg.com/video/growing-the-world-s-largest-fast-food-chain-5tYTLGwDTDGFUVL4pSMHUw.html

 More Customers counting calories: http://www.bloomberg.com/video/thompson-i-do-better-when-eating-at-mcdonald-s-Z0QRy4yUQ_irqCPEg0EdTQ.html

Don Thompson grades President Obama: http://www.bloomberg.com/video/mcdonald-s-ceo-don-thompson-grades-pres-obama-zEB4dxsrS_W3ksGe47X8Ng.html
** BLOOMBERG TELEVISION**
On claims that McDonald’s is out of touch with the minimum wage worker:
“I will be kind I will say I find a lot of the comments interesting. The website [that posted McDonald’s financial planning documents] has been out there about five years. It was intended to do something very simple, to have someone who might be entering the work force for the first time, for someone who has not had management training to be able to manage finances. You can go online now and there are thousands of these kind of websites out there. Five years ago to provide something like that internally I thought it was very innovative idea. When I was at that age, I did not know about financial planning or management. It really took my wife to help me out. I would have loved to have something to help guide me through.”

On whether the minimum wage in the U.S. should be raised:
“I think we have legislators and many people that will determine whether or not it should be raised. We have always been an above minimum wage employer. We are about providing opportunity. A lot of people can debate the entry-level point. We will continue to provide entry-level jobs. There was a time when one over every 10 people has worked at McDonald’s. We can provide the number of jobs we can and when we can help to have a viable income, we will provide that opportunity so the person can rise to the system and gain greater and greater wealth.”
On whether the payroll tax and the implications of consumers turns out as bad as he expected:
“We never did a warning. We said we did not know how we would play out. Thus far we have not seen a tremendous impact from petrol tax alone. What we see is the informal evening out category is contracting. So we are seeing that play out. We are gaining market share. We feel really good about that. Nonetheless, it is fairly tepid in terms of information meeting category.”

On YUM! Brands outdoing McDonald’s sales in China:


“We have been gaining shares back again in China. It has been a troublesome relative to what happened with Chicken. There was an antibiotics scare, which was not part of our supply chain, but nonetheless, it impacts consumers. That was followed by Avian Influenza. We have seen that Avian influenza impact has dissipated. That is great for the marketplace. We’re seeing consumers starting to come back relative to chicken purchases. China will be a positive market for us. We are not gauging our success in China based on someone else.

On McDonald’s earnings:
“Everyone needs to keep in mind, we grew revenues. Not everyone is growing revenues. We grew income. We grew earnings per share and we have taken the market share. We have outperformed the competitive set. There are a few players doing well. We’re going well in the U.S. relative to our own positioning. To continue to grow we have to continue to appeal to customers…We have to make sure we have a good image. A new look.

On whether he has a bigger responsibility to make sure there is a pathway to higher level jobs for all employees:
“When I started with McDonald’s 23 years ago I came here as an electrical engineer. I had no idea what McDonald’s meant or what had happened. Over the past 23 years I have seen amazing things. 40-percent of our executives started as hourly employees. Over 50-percent of the franchisees’, those that own and operate restaurants started as hourly employees. There is no other institution that can boast of those kinds of opportunities and success stories across the system. What we’re really about is making sure of regardless of where you came from in life – some of those people have high-school diplomas only. Some of them have their MBA’s, but every last one of them has the opportunity to show what they can do. We stand for opportunity, always have. Also a very diverse system. We represent those who walk through the doors.”

On McDonald’s using fresh ingredients:
“Health will be determined by the person who decides to buy it. I will tell you, yes, more fruits and vegetables is part of our plan. I would say to you a Big Mac, two all beef patties, lettuce, cheese, pickles, onions on a sesame seed bun, is all real food. It is all very fresh food. Because of the number of people we serve, it does not get fresher… if you get an egg from us it is one of the freshest you’ll ever have.”

On McDonald’s being seen as encouraging obesity problems in America:
“There are a lot of questions that we will keep getting. We are a lightning rod because of our size. We will keep answering the questions…I would offer to any of our customers and consumers in general, get to know McDonald’s and your own research, your own data. Don’t listen to what someone says and don’t listen to just what I say. Do your own research. I think what you will find you’ll understand this is a broader issue in the world, broader than McDonald’s”
“There is a responsibility we  have a socially responsible business to be able to help people – our customers realize they have opportunities to get whatever they like to get. We can help change. We have done that. We have added more fruits and vegetables. We  have changed our Milk and try to make containers more appealing for children. We have done a lot of things. We will continue to try to do more.”

On parents claim that McDonald’s is marketing fatty foods to kids:
“I saw when was the last time you saw Ronald [McDonald] eating food marketing to your children? You have not seem him do that. That was a big thing. People attack Ronald McDonald… He is a clown. He represents our charity. The average person eats at McDonald’s 3-4 times a month. Here is question. I am parent of two children. I know what my kids eat. I would bring my kids to McDonald’s then and I will bring them now because the food it high-quality, safe, and they have choices. If my kids want to have fries, I will let my kids have fires if they are active and if they are moving. There is nothing wrong with having some fries. Burges and fries are an American staple. By the same token, my kids eat vegetables and they have no choice but to eat them. I would just offer to us all, get to know what we have. We have great side salads. They don’t represent a lot of our sales but we have great salads. We have a snack wraps and smaller sizes. We have apples and smoothies.”

On whether McDonald’s after Midnight will expand nationally:
“The U.S. leadership team will make a determination as to what happens with McDonald’s after midnight. We have similar initiatives in other parts of the world, and I think there is data that says this is a positive things. I think a franchisee and leadership teams will decide how aggressively we will move into something like that.”

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