Original Story: nytimes.com
McDonald’s announced on Wednesday that its chief executive would step down, just days after the fast-food restaurant chain posted one of its worst financial performances in years.
Don Thompson, 51, will retire as president and chief executive, effective March 1, McDonald’s said in a statement. He will be replaced by Steve Easterbrook, the chain’s chief branding officer, who will also replace Mr. Thompson on the McDonald’s board, the statement said.
Last week, McDonald’s reported a sharp decline in sales and earnings as stiff competition and evolving consumer tastes continued to take a toll on the firm, one of America’s biggest restaurant brands. It has lost a lot of ground with consumers, including having difficulty attracting millennial consumers who gravitate more toward what are called fast-casual restaurants, like Chipotle.
The company said that revenue in the quarter through December fell 7 percent, to $6.6 billion. Earnings dropped 21 percent, to $1.1 billion, from $1.4 billion in the same period a year ago.
McDonald’s blamed its need to set aside greater reserves for taxes, as well as continuing problems with a supplier in China. Mr. Thompson, who has been with the company for more than two decades and has been chief executive since 2012, had warned that he expected the chain to continue to struggle this year.
Its sales were also hit by supply chain problems. In Asia and the Middle East, sales slumped in the second half of 2014 after a McDonald’s meat supplier was forced to close a processing facility in China over food safety concerns. A slowdown at the Port of Los Angeles resulted in shortages of French fries at McDonald’s restaurants in several markets, including Japan.
In a statement, Mr. Thompson said: “It’s tough to say goodbye to the McFamily, but there is a time and season for everything. I am truly confident as I pass the reins over to Steve that he will continue to move our business and brand forward.”
Andrew McKenna, the company’s nonexecutive chairman, said: “Steve is a strong and experienced executive who successfully led our U.K. and European business units, and the board is confident that he can effectively lead the company to improved financial and operational performance.”
McDonald’s, which operates or franchises more than 36,000 restaurants worldwide, has said that it plans to open fewer stores this year and pare capital investment to $2 billion, the least in more than five years. About 14,000 of its restaurants are in the United States.
McDonald’s has also been testing several new strategies to jump-start sales, including allowing customers to build their own burgers by selecting from a menu of meat patties, buns, condiments and toppings.
The restaurant chain has reduced the number of “value meal” promotions and raised prices for many items in its “dollar menu,” part of a bid to simplify its offerings and get each customer to spend more. Still, analysts warned that those changes were unlikely to bring about a turnaround anytime soon.