Are Poor Ratings Hurting McDonald's?
McDonald's has been struggling of late, including a 3.2-percent decline in its US comps in July. There are a number of theories about its current struggles. Here's another one: That the chain's generally poor consumer ratings are coming home to roost in the form of poor sales numbers.
Make no mistake, consumers say they don't like McDonald's all the time. In July, Consumer Reports rated fast-food restaurants and McDonald's received, by far, the worst rating of the bunch. But it's also true for every other consumer rating that touches on the industry, whether the rating is on hamburgers or general brand perception. Harris Interactive lists McDonald's as having among the worst reputations of any retailer.
Of course, there is a difference between what consumers say, and what they do, and therefore such ratings probably don't matter much when it comes to a giant restaurant like McDonald's.
"When a brand becomes ubiquitous, it's hard to keep cache," said Dennis Lombardi, executive vice president, foodservice solutions, at the consulting firm WD Partners. "You think of an attribute—likely to recommend—why would you recommend a brand everybody knows? Hey, you ought to try breathing man, it's cool!" McDonald's, of course, is ubiquitous. I have several within a couple minute drive from where I sit now.
But that's not the only thing at work here. Subway is even more ubiquitous. But it hardly gets the negative consumer ratings that does McDonald's.
The other thing that causes the chain's poor ratings is the same thing that makes McDonald's the focus of minimum wage protests when lots of other concepts pay the same wages: It's the biggest brand in the QSR business. It's a big, giant, golden fast-food symbol.
"Major fast-food brands stand for everything evil about our food industry," Lombardi said. "Very few people want to acknowledge the food quality at McDonald's is very good. And the food quality is very good. That's not bad beef they're using. It's just cost engineered to keep it in the price range people want to spend." Lombardi likened it to magazine ratings: Readers frequently list Atlantic Monthly or The Economist when talking about high quality magazines. But they don't have the highest circulation numbers.
Indeed, McDonald's ratings among consumers were horrible long before its sales started falling. Most likely, the brand is suffering from a period of weakness, brought about by a number of other factors that we've mentioned before, and it will come back once it fixes those problems. Because it's McDonald's, after all. It's ubiquitous.