McDonald's Tackles Repair of 'Broken' Service
By Julie Jargon | The Wall Street Journal
McDonald's Corp. (MCD), battling back from recent earnings disappointments, is putting unusual emphasis on a longtime challenge: getting its far-flung workforce to provide service with a smile.
The fast-food giant, whose restaurant sales in the U.S. began to slip last year, is pushing franchisees to improve staffing and service amid mounting complaints about rude employees.
In a webcast McDonald's executives held with franchise owners last month, the company said 1 in 5 customer complaints are related to friendliness issues "and it's increasing," according to a slide from the presentation reviewed by The Wall Street Journal. The webcast identified the top complaint as "rude or unprofessional employees."
One slide said that complaints about speed of service "have increased significantly over the past six months." Another mentioned that customers find service "chaotic."
"Service is broken," said a slide from part of the webcast delivered by Steve Levigne, vice president of business research for McDonald's USA.
One franchisee said McDonald's has renewed emphasis on customer service since Chief Executive Don Thompson installed Jeff Stratton, the chain's global chief restaurant officer, as president of McDonald's USA in November, after two consecutive quarters in which the company missed Wall Street's earnings expectations.
"The new leadership has decided to focus on customer satisfaction as a real driver for us to build the brand and build sales," this franchisee said, adding that the company had been gaining market share for years. "So for us to maximize the potential that's out there, we've got to be the leader in guest satisfaction," the franchisee said.
A McDonald's spokeswoman wouldn't comment on the webcast or on what the company is doing to address complaints, and declined to make executives available for interviews, citing a quiet period ahead of the company's earnings on April 19.
McDonald's, which has more than 14,000 U.S. restaurants, performed well throughout most of the economic downturn by sticking to its strategy of remodeling and tidying up restaurants and rolling out a steady stream of new menu items at a range of prices—from inexpensive snack wraps to more costly fruit smoothies—intended to appeal to more consumers.
But achieving speed and friendliness of service across the chain has been a particularly elusive goal, at least in part because about 90% of McDonald's restaurants in the U.S. are owned by independent operators.
In QSR Magazine's annual Drive-Thru Study, the only comprehensive industry comparison of customer service at fast-food chains, other restaurants have consistently outperformed McDonald's in those areas. In last year's study, the average service time at the McDonald's drive-through studied was 188.83 seconds, compared with 129.75 for industry leader Wendy's Co. (WEN). Chick-fil-A had the top friendliness ratings. Out of the seven major chains in the study, McDonald's was second to last in the "very friendly" ranking, just above Burger King (BKW).
Some analysts say McDonald's is continuing to lose customers.
During its webcast, McDonald's told franchisees that customers rate good service almost as highly as dollar value, pointing to a National Restaurant Association survey.
"The service varies so much depending on which McDonald's you visit. It can vary from very friendly to very rude," said Jane Fiedler, an office manager who occasionally visits the same downtown Chicago location.