When I was a little boy, my mom would take me shopping on Kensington Avenue in Philadelphia. That was a time when you could actually walk around that area and not be reasonably certain that you were either going to be mugged, physically assaulted or otherwise made to feel uncomfortable. I’m thinking this particular memory was about 1980. Feels like I was in Kindergarten. We went shopping up there and my mom took me to the McDonald’s (MCD:NYSE) at Kensington & Allegheny (K&A for those not from the area).
This particular McDonald’s was right under the “El” (Elevated Train). Thousands of people passed it each day on their way to work. Many others made that corner home, literally. Lots of homeless people sought out the shelter and warmth of the train station steps. In any event, on this particular day, we were sitting at our table eating whatever it was that we ordered and a homeless woman made herself comfortable across from us. I vividly remember, after all of these years, her telling us the story about how she was getting ready to go to Atlantic City with some of her friends. Inevitably, the conversation turned to her asking for change for “bus fare”. My mom, emptied her purse of spare change. As soon as we got up to leave, the lady dashed up to the counter to buy a cup of coffee. She probably sat there for hours nursing that coffee. This was my original impression of McDonald’s.
McDonald’s is keenly aware of the need to enhance their image away from the fast food, junk for a buck, drive through that the market is saturated with. The strategy is to make it feel like more of a premium experience every time you walk into a McDonald’s restaurant. The experience, of course, fetches a premium price.
A hallmark of their strategy is the conversion of their stores into what they call the “Experience of the Future”, or EOTF. This EOTF includes cleaner, more spacious restaurants, better service and better, fresher food. (Imagine that!). McDonald’s is converting 1300 stores every quarter into these newer models. That is having an impact on their bottom line will also seems to be working. My wife and I took our four boys to McDonald’s the other day and the boys had their own place to eat, complete with gaming screens.
Clearly, their initial impression of McDonald’s will be different than mine.
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