Confidence Increases in McDonald's Turnaround

You can call it a comeback: McDonald’s is finally seeing a turnaround in its two-year slump.

McDonald’s shares hit an all-time high last month after the company reported that global-same store sales jumped four percent in the third quarter following six consecutive quarters of flat or negative results. China’s same-restaurant sales increased nearly 27 percent for the quarter, and even the United States market, which had been in a serious lull, reported a 0.9 percent increase in sales at restaurants open more than one year ago.

According to McDonald’s CEO Steve Easterbrook, the positive trend isn’t a fluke—the uptick in sales will continue through the fourth quarter.

“The progress we have made in a short amount of time gives me confidence we’re making the right moves to turn around our business and reposition McDonald’s as a modern, progressive burger company,” Easterbrook said in QSR Magazine.

Easterbrook turned skeptics into believers with bold actions like rolling out all-day breakfast in the United States, boosting wages for hourly workers in company-owned restaurants and tweaking quality by starting the lengthy switch to antibiotic-free chicken. The company is also determined to correct many of its key mistakes of the past, including refining—yet improving—its bloated menu.

By focusing on better-quality products, new store designs and new lines of management reporting globally, Easterbrook, who took over for Don Thompson in March, has infused the company with new energy and helped McDonald’s turn the corner.

“I have learned as an observer of McDonald’s and the restaurant industry for more than three decades that the company is filled with smart, focused, hard-working and dedicated people,” said Christopher Muller, a professor of hospitality at Boston University. “While they occasionally lose a step or two, they always seem to pick up the beat again and get back to leading the parade.”