I was actually intending to write this story for more than a couple of years on how operationally, the McDonald’s brand esteem and operational performance in the market seems to be consistently falling. 

I now believe that this fall is increasing in pace.

All the while, competition has watched and applied learnings from this brand that was the market leader for decades in so many ways.

And I ‘get’ the staffing challenges in the market some might suggest explain away operational difficulties, but they are being faced by every similar food business in similar ways. 

And these types of issues I was noticing some time before 2020.

NOTE: McDonald's ranked at number 2 in our 10 Biggest Fast Food Franchises in the Australian Market - see it HERE

The symbolism of the elusive drive-thru purchase receipt

Have you tried to get a receipt from a drive-thru purchase at McDonald’s?

This seems crazy as a point in its own, but it is oddly symbolic of what is happening in this business.

Traveling as much as we do for video production, we’re often squeezed by time and location and find ourselves often grabbing ‘Maccas’ drive thru onto the next video shoot.

It is a running joke in our team wondering how funny it will be in how I react in trying to get a receipt for our purchase - which after all, my accountant requires it for company expenditure!

How the story goes

Firstly, you ask the payment window for a receipt, they mostly always tell you to ask the next window. Only on one occasion, have they printed me one there, which makes sense you’d think given that is the place of the transaction.

Moving to the next window for a receipt is where the problems start.

Secondly, you ask at the food delivery window for a receipt - they are all busy grabbing your order, so you ask two, maybe three times.

Thirdly, you finally get some traction and attention, and someone acknowledges that they’ve heard you, and that ‘someone’ will get it for you.

Fourthly, the manager appears at the window, confirms again that you are actually after a receipt, and they walk about 15 - 20 metres across to what is now just one of two point of sale systems.

If they are both being used, you all wait, including the queue of cars behind you. 

Fifthly, the manager, and usually one or two others stand there and start scrolling through a screen presumably to find your order which by now could be 4 - 5+ orders further back.

Sixthly, they print the receipt, and walk it back over to you, and you need to check to make sure it is the right one, as half the time it isn’t the right one, and we do it all over again.

And don’t even get me started on whether our orders are correct, as mostly every single time they are not, with items missing and menu items incorrectly made being a staple of the experience!

A bit whiny? 

I know, this feels a little whiny and dealing in semantics, BUT it is oddly symbolic of an operational system in decline from what was once a well-oiled, efficient machine. 

What’s even worse in my view, is that nobody seems to be saying ‘this is really not very efficient’.

These are the basics, and if anything, the business was always excellent at executing the basics well.

The competition is outperforming

In contrast the operational efficiency and esteem of a brand like Guzman y Gomez is building.

They also often have only two service counters.

McDonald’s are doing similar, in the hope that their self service screens will take up the slack. 

BUT have you used those screens? They are challenging!

It’s part comical and part sympathy watching so many people utterly confused and frustrated trying to tailor their order, and pay for it.

The McDonald’s app also feels clunky and problematic.

The Guzman app experience feels seamless and smooth - super efficient and simple.

The McDonald’s menu complexity seems to be increasingly holding it back from delivering great products and service to customers at both the ordering and product level.

The Guzman offer is elegantly simple and more easily adapted and delivered upon at store level.

Can Guzman be the ‘modern McDonald’s’ of fast-food in Australia?

Well, the founder Steven Marks certainly seems to want to make sure it is positioned as such.

The current Chairman Guy Russo, and Board Member Stephen Jermyn, were a previous CEO and CFO of McDonald’s respectively. That is no accident.

Barely an article with founder Steven Marks goes by over the years, without reference in some way to mentioning McDonald’s and Guzman in the same sentence all the while they had a minimal national presence by comparison.

Guzman menu expansion

I’ve always been a doubter of the viability of Guzman's claims of aiming to have 500-600 restaurants in our Australian market, and I still am.

However, you can see the business shaping itself up for much wider appeal with a broader menu, which gives the space for location growth with more people drawn to the offer than those strictly looking for Mexican food.

I guess the balance at some point is in how much you dilute the core to achieve that.

In Guzman’s case with their widening appeal menu;

• Coffee - done (and of note is just $2 barista prepared)
• Breakfast egg and bacon burritos with hash browns! - done
• Soft serve cones and sundaes - done

I know, it’s crazy to think of Guzman having a soft serve ice cream cone offer not that long ago.

But there we have it, the brand is slowly and gently rounding out its product offer to appeal as widely as possible, to garner as many customers - and hold them as regular ‘dailies’, as it can.

(Images credit: Guzman Y Gomez Facebook/Photos)

Is McDonald’s in trouble?

McDonald’s better right the ship, and get operationally back to its laser-like customer service and product roots, and reduce complexity in the menu or risk not only gradual, but accelerated erosion of its customer base.

They are no longer the stand-out reliable fast and easy, convenient drive-thru offer in the market. Disgruntled and disappointed people eventually stop coming back when you can’t be relied on. 

Other offers like Guzman are faster, fresher, often more healthy, more accurate, and are taking up real estate spots in and around the vicinity of McDonald’s locations in rapidly growing numbers. 

And taking locations that would have otherwise usually been a McDonald's.

People may scoff given the size and market power of the McDonald’s network (970+ locations) versus a Guzman as an example. 

But keep in mind, less than 2 years ago, Guzman had just 132 locations, today they sit at 208 and growing at almost one new store every week. 

And while that impact may not be felt today, one wonders if unchecked, what the business and market will look like in five, let alone ten years from now for McDonald’s. 

And that spells trouble for people investing $2mil+ and committing 20 years of their lives as a franchisee into a location....