McDonald’s is trying to reassure investors following continued drops in earnings. McDonald’s was keen to comfort shareholders at its annual general meeting, but with earnings falling over the last two quarters the immediate outlook seems anything but promising. Although it will be a gradual process, the fast food chain would do best to stick to initiatives aimed at boosting its image and gaining customer confidence, rather than aggressive expansion.

McDonald’s is in a difficult period right now. Consumer worries over food safety, flagging economies in Asia and unfavorable exchange rates have left the fast food giant’s overseas operations looking weak. McDonald’s has watched its earnings slide over the last two quarters and its share price has been equally lackluster. With half of its $40 billion revenues coming from its overseas operations, the burger chain has some cause for concern.

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The company had to address shareholder concerns at its annual general meeting on Thursday.


“We are not making lists or excuses,” Jack Greenberg, CEO of McDonald’s informed shareholders. “We are taking actions to address these challenges.”


But the company was quick to point out that it is not all bad news. The burger chain still plans to go ahead with its enthusiastic international expansion plans, confident that things will pick up. Sales are starting to improve in some of the major European markets, with extra money being pumped into promotional efforts and an extended menu that offers non-beef options such as pork burgers and ham and cheese toasted sandwiches.


French consumers are being encouraged to make appointments to tour McDonald’s kitchens to reassure them of the safety of food preparation in the chain. Supplier sites are another an option, allowing the French to visit meatpackers to witness meat being butchered. Extra menu options are a key element of tailoring offerings to the differing palates among countries – this week has seen the entrance of pie and chips into the Australian market. If successful, the pies may go international as McDonald’s attempts to provide more choice to its customers.

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Despite the company’s best efforts, regaining consumer confidence will be a gradual process. The latest publicity over beef flavoring in fries has put McDonald’s in an unpleasant light and has further added to the company’s negative image in many countries. The company might be well advised to slow down its expansion plans for the time being and focus on reassuring its current customer base.


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