McDonald’s European restaurants are changing. Out go the bright lights and the plastic yellow and red interiors synonymous with the $22 billion (€16 billion) US fast food chain. In come soft lighting, easy chairs, leather stools and art deco walls, all in earthy shades of chocolate brown, camel, cream and burgundy. The changes are part of an $800m investment from corporate headquarters in Illinois aimed at repositioning the chain for the obesity-fighting, healthy-eating age. Linda Buckley, CFO of McDonald’s Europe, says the money will help fulfil a long-term group strategy of improving the customer and employee experience. But she admits that some competitors have been opening new restaurants “fairly aggressively” in Europe and that, too, has played a part in the beneficence shown by headquarters.
So far, around 20% of McDonald’s 6,400 European restaurants have been redesigned. But do long-time customers feel uncomfortable walking into a place that now feels more like Habitat or Ikea than a fast-food joint?
Far from it, asserts Buckley. “We do quite a lot of customer research as we’re developing the designs and the response we’ve got has been very positive,” she says.
The numbers are looking good too. Europe is McDonald’s second-largest market. Last year, sales in the region rose 5.8% — the best result in 15 years — and operating income increased 9%. Europe contributed 28% to group sales and 36% to operating income.
So how has Buckley helped the “re-imaging” of one of the most recognised global brands? CFO Europe caught up with her in one of McDonald’s flagship restaurants on Edgware Road in west London — just below her office in McDonald’s European headquarters — where, she says, she eats lunch most days.
What’s behind McDonald’s $800m European facelift?
If you go back 20 years, the world was a very different place. We had plastic benches and laminated tabletops, and at the time that was new and different and served us very well. But life moves on and retail changes. If you look at all the other retail players on the high street, they’ve made tremendous changes over the years. So we need to be modern and keep pace and change as our customers are changing. It’s really just about that. It’s about making our restaurants look like places of today and places of tomorrow, not places of yesterday.
So what role have you played in devising this growth strategy?
In choosing the actual colours and design? Absolutely none, thank goodness! My role is about finding ways to support the business strategy in a way that also balances the shareholder interests. France was the first market to start this remodelling because they felt, in their environment, it was the right thing to do to make the restaurants more appealing, and we know they are getting very good results from it. I don’t remember the specific numbers but France has had a very long run of positive comparable sales. When we see good results, we normally want to dig into them and find out why that is and share what we find.