How can McDonald’s turn around sales?

The hits keep coming for McDonald’s Corp., which reported a 3.7-percent decrease in global same-store sales in August, including a 14.5-percent falloff in the Asia/Pacific, Middle East and Africa division and a 2.8-percent decline in the United States. The result worsened from McDonald’s 2.5-percent decrease in same-store sales in July, when that metric plummeted 7.3 percent in APMEA and 3.2 percent in the United States. The major markets of the APMEA division, China and Japan, have struggled the past two months because of new fears that the meat supply in China is unsafe for consumers. McDonald’s said Tuesday that the negative impact of China’s food safety scare might shave between 15 cents and 20 cents off the company’s third-quarter earnings per share. The United States presents problems of its own for McDonald’s, where new division president Mike Andres takes over next month for the retiring Jeff Stratton. In addition to same-store sales that have been negative for most of 2014, the brand has public-relations problems ranging from unpopularity with Millennials to being the industry punching bag for protesters calling for a $15-per-hour minimum wage. Though it could take months or years to appeal, the National Labor Relations Board did not help McDonald’s any when its general counsel found that the franchisor could be considered a “joint employer” with franchisees and thus responsible for all the business practices of those owner-operators. Last month, Europe was the relative bright spot, with sales declining only 0.7 percent. But the problem could get worse in that division as one of its major markets, Russia, remains unstable during its ongoing armed conflict with Ukraine. Russian officials also have begun closing several McDonald’s restaurants and might close dozens more. So what can the Golden Arches do to turn things around in the near term? Andres and chief executive Don Thompson cannot control what happens in China, Japan or Russia, but operations and marketing initiatives in those markets are underway to limit the damage of external events. In the United States, they cannot control how the NLRB might rule against them or win the PR battle with minimum-wage protestors any time soon. “As a system, we are diligently working to effectively navigate the current market conditions to regain momentum,” Thompson said in a statement. “For the long term, we remain focused on strengthening the key foundational elements of service, operations and marketing to maximize the impact of our strategic growth priorities for our customers and our business.” McDonald’s has clued industry watchers into some of the initiatives that would move its turnaround forward at home and abroad. One that needs to happen quickly is a system-wide rollout of a mobile solution for digital ordering and payment. Competitors have largely achieved this already, and McDonald’s has tested several programs in several markets. The brand also wants to allow for customization in its sandwiches, in keeping with fast-casual rivals like Five Guys. Requiring their franchisees to invest in new kitchen equipment would foster that transition, but the brand might also have to listen to what franchisees have been saying for quite some time and simplify the menu.