Word: mcdonaldization
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Dates: during 2000-2009
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There was a time not so long ago when U.S. fast-food giant McDonald's was viewed by European consumers as the advance scout of what the French loudly decried as American cultural imperialism. The Golden Arches, ran the prevailing European line, were a threat to the Continent's refined palates and appreciation of the civilized sit-down meal, and the livelihoods of people staffing "real" restaurants. Well, with the global economic crisis deepening, even the French aren't complaining nowadays - especially with news that McDonald's plans to invest more than $1 billion to keep its lucrative European business...
...Monday, McDonald's confirmed earlier press reports that it will spend about $1.1 billion - more than half its total global investment funding in 2009 - to revamp scores of existing restaurants in Europe and open 240 new ones there. That effort will not only focus on relatively new markets in Eastern Europe like Russia and Poland, but also sink roots deeper in West European nations like Italy, Spain and France - generating about 12,000 badly needed new jobs in the process. As part of that expansion plan, McDonald's says it will add about 400 new McCaf...
Such optimism in the face of prevailing economic gloom is understandable given the apparently recession-proof recipe McDonald's has cooked up. Indeed, while most companies limped out of 2008 on slumping results that look likely to plummet in 2009, McDonald's on Monday announced earnings of $985.3 million in the fourth quarter of last year. While that near billion-dollar activity represented a 23% drop over the same period the previous year - due mostly to an extraordinary tax bonus accounted to 2007 books - McDonald's also revealed an 11% rise in fourth-quarter consolidated operating income to $1.5 billion...
Europe now ranks as McDonald's largest region in revenue terms. Although Europe has nearly 25% fewer outlets than the U.S., in 2007 its $9 billion in revenue outpaced the $8 billion generated in America, partly because of a strong euro but also because of consistently higher sales. Given that, McDonald's new European investment strategy seems quite clear: provide its operations in Europe a boost by multiplying the number of restaurants capable of serving clients there. And ironically, a swiftly tightening recession may be the best environment in which that can be done. (See the top 10 food trends...
...People forced to economize by forgoing outings to restaurants will visit McDonald's to compensate, while lower-income people already frequenting McDonald's will tend to choose cheaper menu options there rather than giving it up," says Raphael Berger, deputy director of the consumer division at France's Research Center for the Study and Observation of Living Conditions in Paris. "McDonald's has successfully marketed itself as a festive and affordable dining option to young and less-affluent people. That is now starting to spread to other segments as people in most socioeconomic categories feel less affluent...