Weekly Wrap Up: McDonald’s turnaround

To say that the world’s most famous fast food chain, McDonald’s, is in financial trouble might seem a gross exaggeration. However the US giant is certainly in an unfamiliar and uncomfortable position. In 2014, the Company recorded its first annual decline in global same-store sales in a dozen years.

The tip of the iceberg (lettuce) is their most recent announcement stating that British Steve Easterbrook will replace current Chief Executive, Don Thompson in March. The Brit will have to find a way to turn around one of the biggest challenges the $87bn company has faced in its 60-year history.

During the recession, the company profited from customer demand to eat cheaply, as well as staff that were happy to put up with low wages, simply glad to have a job. A couple of years later however, America witnessed strikes by its lowest-paid workers, which included Mcdonald’s. Due to the Company’s global status, it was one of the most targeted by the media. And because of their initial refusal to increase wages, they were also one of the worst affected. It angered some regular customers, who took their money elsewhere. This, along with a failed PR twitter campaign in 2012, ‘Tell us what you think of us’, begins to answer another question – why are McDonald’s struggling?

In recent years, Mcdonald’s has found more and more competitors encroaching on their turf. In addition, the shape of the market is changing. Consumers are no longer interested in food that is just fast – amongst other things, they want healthy, fresh and natural. The consumer is willing to pay more, changing ‘fast food’ into what is becoming known as ‘fast-casual’ food.

McDonald’s are falling behind competitors in an overcrowded market. However, the company has introduced campaigns over the years promoting fresh produce or healthy salads. And they are currently running a transparency campaign to give more insight into how their food is made and what goes into it. Predictably, this has brought even more negative press, as the horror of what goes into their food has been revealed.

It seems that McDonald’s should delve deeper into their brand positioning to redefine their 60-year old reputation. As the Company’s former Chief Brand Officer in charge of marketing and menu innovation, Easterbrook seems perfectly tooled to take on this challenge. Perhaps cleaner processes, less junk and better quality ingredients will finally be on the menu. Single figure ingredients for their fries would be a start.



This week, Abchaps welcomed London and West Country Lawyers Thrings to our Sky Bar to exchange our shared areas of expertise. We also hosted a Market Lunch where the outlook and opportunities of AIM was discussed.



Panmure Gordon made two appointments to its research team: Jonathan Leinster as consumer analyst from UBS and Mike Stewart, formerly of Shore Capital, as retail analyst. Erik Anderson, previously of Investec, is joining its corporate broking team. Meanwhile, at Hamlins, Charles Bezzant has been appointed as partner, and he joins from Reed Smith.



"Fast-casual": A fast-casual restaurant is a type of restaurant that does not offer full table service, but promises a higher quality of food with fewer frozen or processed ingredients than a fast-food restaurant.



This weekend, see the inside of one of London’s most iconic film sets. Aldwych tube station has been used in Atonement, V for Vendetta, and Bond, and this weekend is being opened by the London Transport Museum for a rare insight into London’s past.

From underground to up in the air, London is currently playing host to the inimitable Cirque du Soleil, with their new show, Kooza, tickets are still available, but they’re going fast.

Finally, as only Shoreditch can, Floripa is holding a carnival brunch from 12pm – 6pm, promising beach burgers, samba, and potentially some margharita’s!

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Horsemeat Scandal: The beginnings of a better food supply chain?

What’s your favourite horsemeat joke? Mine is “Went to the fridge to check my burgers, aaaaannndddd they're off!” There have been hundreds, with #horsepun still a popular hashtag weeks after the scandal first broke. It is heartening to see a little humour injected into the story because horsemeat isn’t actually dangerous - plenty of people around the world eat it, it’s just not mainstream in our culture. Some mischievous pubs such as the Lord Nelson in Southbank have even jumped on the public’s increased awareness of horsemeat by making a horse special burger so you can actually try a 100% horsemeat burger for yourself.

The problem, in terms of PR for the food industry, is that because of the consumer angle and the widespread nature of the problem affecting big brands, the coverage is unlikely to die down soon. It was first reported in January and it is still regularly a front page story on mainstream news outlets such as the BBC Online. Only last week horsemeat was found in Ikea meatballs, forcing the furniture giant to embarrassingly withdraw them from sale in 14 European countries and I’m sure that won’t be the last we hear of it. The problem is not necessarily the safety factor but the bigger issue of so many brands not knowing what is in the food they are selling.

The scandal is Europe-wide and not one that can be resolved overnight. A whole rethink of the food supply chain is needed and a debate should be had about the true cost of meat. Looking at the products involved, there is no doubt that intense price competition in certain sectors of the food industry is a major contributing factor to the fact many of us will have unknowingly eaten horse. The scandal is certain to make consumers think twice about buying cheap meat.

This brings us to British meat producers. The British farming industry has for a long time had to conform to some of the strictest animal welfare standards that are not applicable to most of the EU. This has left British farmers’ prices uncompetitive in the rest of the EU and has led to much of the meat sold in Britain being imported from abroad. However, it has made our product a premium one. In the light of recent supply chain issues (as well as a devalued pound) British exports could increase significantly.

Tesco, as the largest food retailer in the UK, has taken the brunt of much of the coverage. In some ways it has been a PR disaster considering only 3 out of 259 products actually contained any horse but Tesco has handled the situation sympathetically. It clearly and very quickly apologised to its customers for its mistakes by taking out full page adverts in the national press, setting up a new food website, speaking at the National Farmers Union (NFU) conference last week and pledging to buy meat from closer to home. This is a move obviously welcomed by the farmers in attendance at the conference who have been pushing British retailers to give greater support to UK farmers for decades. NFU President, Peter Kendall welcomed the news commenting “British farmers [invest] a lot of time, effort and heartache to produce high-quality beef and need to be supported by retailers”.

There are PR opportunities for companies that have forged close links with their suppliers and for that reason have created a genuine product that they can be sure is contaminate-free. For example McDonalds is “very confident” its burgers are free of horsemeat and believes this is because of its close links with its farmers. McDonalds has shown it is possible to sell 100% beef at low prices because of good, sustainable working relationships. Simlarly Waitrose, which never buys on the open market, reported last week via an email to customers that none of its tests have shown any horse contamination. The shortening of the supply chain and building of relationships seems to be the answer to a contamination-free product, as well ensuring a more consistent price of meat for buyers and greater piece of mind for the farmer.

The supermarkets and food processors involved really only have themselves to blame for the whole incident. This story has brought to light what farmers have been saying for a long time. By constantly treating farmers unfairly, and putting pressure on them to produce meat as cheaply as possible, an incident like this was bound to happen at some point. It is now up to the large conglomerates which hold the power in the food industry to make the changes required to restore public confidence in their products. Working more closely with farmers would be a good start. To ensure a contaminate-free product in the future may mean higher prices of meat in the long term, but in terms of paying a fair price for quality product, I believe public opinion is moving in that direction.

Richard Sowler

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Gorkana Breakfast Briefing with Martin Barrow, Health Editor, The Times

With a growing stable of life science and med tech clients, the thoughts and general musings of the person responsible for The Times newspapers health and social care coverage was bound to be, not only interesting but relevant to many of our clients. The two Olivers, Oli and Olly made the journey across town to the West End and the fantastic lecture hall at the Royal Institute of British Architects (RIBA) to hear what Martin had to say.

Martin Barrow has been Health Editor at The Times since November 2011, but started working for The Times over 21 years ago. His first role at the paper was on the business desk where he worked for 12 years, followed by spells as foreign news editor and home editor before taking charge of the two person health team. With such a wealth of experience behind him the hour he was given looked unlikely to suffice.

Rather than repeating what Gorkana has very helpfully written up here it was incredibly interesting to hear what Martin covers in detail, the host of issues he is currently interested in, how he likes to work and what he looks for in a story. He also highlighted the benefits of online coverage in The Times, despite being behind a paywall, the website has over 120,000 paying subscribers who actively engage with the paper and explore new content.

Thanks again to Gorkana for organising this and a full review of the meeting can be found on Gorkana PR via this link.

Oliver Hibberd


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