What McDonald's can learn from Canada
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Well, that didn鈥檛 work. 惭肠顿辞苍补濒诲鈥檚 Corp. reported a 4% decline in comp sales for February, the month it rolled out the sweet 鈥淐hoose Lovin鈥欌 campaign. Even those who did don鈥檛 seem to have chosen 惭肠顿辞苍补濒诲鈥檚 as well.
So now what? 惭肠顿辞苍补濒诲鈥檚 can either decide it鈥檚 in the middle of a two-year 鈥渃orrection鈥 that will result in a slightly smaller but stable U.S. operation or it can continue its attempt to rebuild sales and consumer attitudes. If it wants to do the latter, it might look at its Canadian operation for pointers.
惭肠顿辞苍补濒诲鈥檚 Canada last week began a new聽聽campaign. It drops the 鈥Please聽just listen to us for a minute鈥 desperation of the 鈥淥ur food. Your questions.鈥 campaign that ran first in Canada and then in U.S. and it avoids the Hello-Kitty-cuteness of the 鈥淟ovin鈥欌 ditties. Instead, the new advertising reverts to what worked in 1980s: Positioning 惭肠顿辞苍补濒诲鈥檚 as a friendly, convenient, affordable place to go, meet and eat. No 鈥淲hat鈥檚 really in McNuggets鈥 guilt trips. No 鈥淵es, we have an app!鈥 Millennial pandering. No 鈥淵es, we have customization!鈥
All that is fine. But a better positioning for 惭肠顿辞苍补濒诲鈥檚, one that might build sales here as in Canada, is embodied in one of the new TV spots this way: 鈥淚s there a place that makes room for everybody? Somewhere that welcomes you no matter what your name is, where you鈥檙e from or what you do. Somewhere to catch up with friends. Or with the world. To share a meal or just a laugh. A place to be with your family, whatever that may be. 鈥淚s there a place that connects with those around you and that will accept you for who you are. I work at that place.鈥
惭肠顿辞苍补濒诲鈥檚 agency N/A drove across Canada and filmed vignettes with 400 people at its restaurants including聽聽a rock climber who lives in her van. As Hope Bagozzi, senior director of creative and digital innovation for the chain, says in the introductory video in the series, 鈥淭his campaign is absolutely all about people. We get to see the humanity, the smiles, the warmth, the values, the caring. And, you know, that鈥檚 what makes people so great.鈥
The campaign leverages 惭肠顿辞苍补濒诲鈥檚 unassailable strength: Its restaurants are everywhere. They are in every neighborhood. Canada makes it a positive, asserts it a badge of community. Simplicity is good for advertising as it is for menus.
It鈥檚 difficult to precisely gauge how well 惭肠顿辞苍补濒诲鈥檚 1,400-store Canadian operation has done in contrast to the U.S. 惭肠顿辞苍补濒诲鈥檚 Corp. puts results for Canada鈥攁long with Caribbean, Central America and South America鈥攊n a 鈥淥ther Countries & Corporate鈥 (OCC) category in SEC filings. For 2014, the OCC category posted a 6.6% comp sales聽gain, compared with the -2.1% decline for the U.S. Much of that may have come from Arcos Dorados the franchisee that operates 2,070 restaurants in the area. It average an 8% comp-sales increase in the first three quarters. It reports Q4 and full-year earnings on March 17.
For February, disastrous for 惭肠顿辞苍补濒诲鈥檚 U.S, the company reported, 鈥淪trong comparable sales in 惭肠顿辞苍补濒诲鈥檚 Other Countries & Corporate segment contributed positively to the Company鈥檚 global comparable sales performance for the month.鈥
Even if Arcos Dorados has accounted for much of the OCC gain, Canada clearly isn鈥檛 dragging it down. It鈥檚 doing better than the U.S. and its performance is worth analyzing by new CEO Steve Easterbrook and his corporate staff.
Canada has done well by heavily promoting coffee鈥攐ften with giveaways鈥攖o build breakfast sales as it battles Tim Hortons for morning supremacy. The absence of biscuits, not a Canadian tradition, simplifies the breakfast menu. Canada kept the Angus Third Pounder line after the U.S. stopped it, giving it a large burger with which to compete with the 鈥渂etter burger鈥 brands. And it has created a more inventive list of premium-price items, such as the Jalape艌o Mighty Angus and Steak 鈥榥 Caesar McWrap.