McDonald’s re-positions marketing in global slowdown – Australian confidence ‘fragile’

Posted by AFN Staff Writers on 25th July 2012

McDonald’s newly appointed global chief executive Don Thompson includes ‘fragile consumer confidence’ in Australia as one of the factors that slowed growth in the Asia Pacific region for the company. This was in contrast to the previous year when Australia was one of the best performing countries for the global McDonald’s group.

McDonald’s has just issued its global results for the US fiscal second-quarter. It reported a profit of $US1.35 billion, which was down from $US1.41 billion the prior year’s same period.

With the release of second quarter figures showing a 4.5% slump in the fast-food giant’s global earnings, Mr Thompson said the economic environment in the Asia Pacific region was tough.

“Across this region, we are seeing fragile consumer confidence in Australia, Japan’s uneven recovery, and an economic slowdown in China,” Mr Thompson said.

In response to customers’ economic concerns, McDonald’s is focusing on value meals for the budget-conscious.

“We are positioning our markets appropriately in this environment with strong value platforms to build traffic. And we will complement these platforms with average check builders that include new food news and brand extensions,” Mr Thompson said.

“The Loose Change Menu introduced in late March has helped drive guest count and sales. And as expected, once customers realise that this value offering is not going away, the use of the menu has levelled out and they are beginning to trade up to other items like extra value meals,” he added.

The idea of a ‘loose change menu’ is a growing marketing trend across the fast-food industry with KFC introducing its “Streetwise Meals” and Hungry Jack’s the “Penny Pinchers Menu.”