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Richard Adams

Richard Adams
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  • Buy McDonald's Before This Storm Subsides [View article]
    Automation can only go so far in a restaurant, especially since McDonald's CEO is determined to offer more "customization". The order taking process is only a small part of this labor intensive business. Though, some forms of automated ordering could speed up service times. Keep in mind that 75% of McDonald's USA business goes thought the drive-thru, that's going to be tough to automate.
    Jul 28, 2014. 06:38 PM | 2 Likes Like |Link to Comment
  • Buy McDonald's Before This Storm Subsides [View article]
    Investors should not count on endless menu price increases at McDonald's. The core menu is already too expensive (Big Macs, Quarter Pounders). With so many menu items available for $1.00 franchisees learned long ago that raising prices on the larger sandwiches just sends consumers over to buy a bag full of sandwiches for the price of one large sandwich. As long as the Dollar Menu is around prices for the rest of the menu cannot be increased at McDonald's USA.
    Jul 28, 2014. 05:26 PM | 2 Likes Like |Link to Comment
  • Restaurant Roundup: Companies To Watch [View article]
    "we are expecting McDonald's to right the ship in the not-too-distant future."

    Any specifics and what moves they might make to right the ship?
    Jul 14, 2014. 06:25 PM | Likes Like |Link to Comment
  • McDonald's tests order-ahead mobile app [View news story]
    Absolutely right. Sales at McDonald's are stagnated by slow service. The menu is too large and too complicated. The kitchen operations are impossible. They took a fast, efficient restaurant operation and ruined it trying to be all thing to all people.
    Jun 24, 2014. 06:17 PM | Likes Like |Link to Comment
  • What To Make Of That 5% McDonald's Dividend Hike [View article]
    Counting on a 4-5% same store sales growth might be a stretch, at least in the USA. It appears that the average McDonald's in this country is going to have trouble increasing sales because of an overly complex menu resulting in slower service and longer lines. McDonald's USA will be lucky to squeeze out SSS increases in the low single digits in coming years unless they simplify their operations and increase the capacity of the restaurants.
    Jun 4, 2014. 04:43 PM | 3 Likes Like |Link to Comment
  • McDonald's: The Real Estate Juggernaut [View article]
    McDonald's owned real estate? It's something of an urban legend that McDonald's owns most of their locations. In the 1970s and 1980s the company purchased as many of their sites as possible. In the 1990s they turned to leasing many sites from a privately held REIT owned by McDonald's and six of their major suppliers.
    In 2003 McDonald's sold their portion of the REIT to the other six owners.

    The accumulated assets of the REIT are not publicly reported and do not show up in McDonald's reporting. McDonald's shareholders do not benefit from equity growth in the REIT.
    May 29, 2014. 05:27 PM | 2 Likes Like |Link to Comment
  • McDonald's And Menu Simplification: Part 1 Of 3 Ways To Tell When The Worst Is Over [View article]
    $15? Maybe in New York City but in the real world it's more like $8.00 / $9.00. But, my main complaint about a chain like Five Guys is that the service is so slow and there appears to be no concern about doing things faster.
    May 3, 2014. 01:59 PM | Likes Like |Link to Comment
  • McDonald's And Food Integrity: Part 2 Of 3 Ways To Tell When The Worst Is Over [View article]
    "Natural" is another topic entirely - If one wants "natural" they should never eat at any restaurant, never shop at a grocery store, and stay home and grow their own veggies and milk their own cows. Food distribution on a massive scale involves some food processing, be it at McDonald's or Whole Foods.
    Apr 30, 2014. 12:59 PM | Likes Like |Link to Comment
  • McDonald's And Food Integrity: Part 2 Of 3 Ways To Tell When The Worst Is Over [View article]
    This is a tough one because since the days McDonald’s sold 15 cent hamburgers the food has been questioned simply because of the price point. Today it’s primarily because of the Dollar Menu.

    It would be a huge mistake to “change everything” because to then market the changes they would have to admit that previously there was something wrong with the food, and there’ isn’t.

    Let’s take the case of those silly internet videos about the food being so full of preservatives it doesn’t degrade over time. First of all, IMHO those pictures and videos are fake. But let’s apply a little intelligence – what possible motivation would McDonald’s have to add a lot of chemicals, preservatives, or additives to make the food last forever? They are not making your sandwich in a far off factory hoping to sell the product in the next thirty to sixty days. As the
    CEO said on last week’s conference call, “We actually cook in our restaurants”
    (a shot at Taco Bell where they just heat things up).

    With all due respect to my fellow fast food consumers, most of what people think on this topic is driven by ignorance and / or snobbery. Those are tough things to overcome and changing everything is not the answer if afterwards McDonald’s would continue to be the low cost provider.

    By the way Milo, McDonald's USA has been serving salads since 1989, the 2005
    salad program was a product upgrade and reintroduction. Do they sell well? No.
    Apr 29, 2014. 05:10 PM | Likes Like |Link to Comment
  • McDonald's And Menu Simplification: Part 1 Of 3 Ways To Tell When The Worst Is Over [View article]
    "Where else would you get something within 4 minutes"

    For one - Chick fil A

    McDonald's corporate standard for service is 90 seconds from order to delivery.
    But that's unrealistic with this menu and that's why they are in the middle of a "reset" on inspecting and grading the restaurants and instead are focusing on trying to solve the service problems.

    If I want to wait four, five, or ten minutes I'll go to Five Guys. McDonald's
    will not grow sales with slow service.
    Apr 29, 2014. 04:03 PM | Likes Like |Link to Comment
  • McDonald's And Menu Simplification: Part 1 Of 3 Ways To Tell When The Worst Is Over [View article]
    The Angus didn't sell because the price got so high that customers could
    buy a bag full of food from the Dollar Menu for the same price.

    Remember, McDonald's is the low cost provider.
    Apr 28, 2014. 02:37 PM | Likes Like |Link to Comment
  • McDonald's And Menu Simplification: Part 1 Of 3 Ways To Tell When The Worst Is Over [View article]
    Menu complexity is not just about the time it takes to order food.
    That's about 10% of the problem. The real problem is what happens in the
    kitchen. I've tried the new Clubhouse sandwich twice. Both times I went
    inside and ordered at the counter. There was no line and only a few
    customers in the dining room. From the time on my receipt to the time I
    got my sandwich was four minutes. This is a system built on speed and
    Apr 28, 2014. 02:34 PM | Likes Like |Link to Comment
  • McDonald's And Menu Simplification: Part 1 Of 3 Ways To Tell When The Worst Is Over [View article]
    You make a great point about actually visiting the restaurants. It’s too bad
    the McDonald’s corporate executives don’t do that more. It was obvious
    5 years ago thatmenu complexity was becoming a problem.

    Simplifying the menu at McDonald’s is going to be very difficult because:

    * Everybody in McDonald’s leadership has their favorites, whether the favorite
    sells well or not.

    * Many items are on the menu for political or public relations reasons.

    * When sales are soft it’s tough to reduce the offerings. Even if an item only sells a few a day at least it’s contributing something to sales.

    * Very few decision makers at McDonald’s have any real restaurant experience.
    When franchisees express concerns over the menu they are told to work harder
    at it or add more crew to the kitchen.

    * Wall Street types will continue to demand “innovation” which leads management to boast about their new product pipeline and every new product is more complex than the previous menu item.
    Apr 28, 2014. 01:13 PM | 2 Likes Like |Link to Comment
  • Breakfast And Coffee Wars: McDonald's Can't Win Everywhere [View article]
    As an industry veteran I can tell you that the harsh winter had a huge impact on McDonald's because of the high concentration of restaurants in the East and Northeast. The first quarter tells us very little about sales trends at McDonald's in the USA.

    If there is a sales problem at McDonald's it's because of an overly large menu and an increasingly complex operation. Trying to serve breakfast all day would be a disaster leading to real sales decreases. It's not going to happen.
    Apr 25, 2014. 02:06 PM | Likes Like |Link to Comment
  • McDonald's pricing gets even more interesting [View news story]
    McDonald's will always have "scattered" pricing because they have the most franchisees with the most stores and those franchisees set their menu prices. McDonald's can make suggestions, and they do so through an arms-length consulting company, but in the end the franchisees make the pricing decisions.
    Mar 27, 2014. 01:53 PM | 1 Like Like |Link to Comment