CHICAGO -- Sandra Bachmann says, "Two Quarter Pounders with cheese."
It's what hungry people poised at a McDonald's counter tend to say. But Ms. Bachmann actually is hungry for information: Does the employee smile? Is the kitchen clean? Will the order be accurate and hot?
Ms. Bachmann is a mystery shopper, and mystery shoppers represent the latest hope for a turnaround at McDonald's Corp. Since Jack Greenberg took over as chief executive in 1998, he has reorganized management, added new menu items and introduced a costly new made-to-order cooking system. But none of that has restored growth to the world's largest restaurant chain. Sales are sluggish at stores open more than a year, and profit has declined four quarters in a row. Just Friday, the company reported it expects to record a fifth straight quarter of profit decline, blaming a weak world economy and unusual charges of up to $245 million relating to severance and unrecoverable costs from its Monopoly-game fraud scandal, among others. U.S. same-store sales also remain slightly negative so far for the fourth quarter.
So Mr. Greenberg's latest strategy involves hiring experts such as Ms. Bachmann -- more than 150,000 in all -- to evaluate service, cleanliness and food quality using a single set of standards and measurements in more than 13,000 restaurants nationwide. The program is designed to enhance, perhaps even perfect, execution and is based on the premise that large improvements are needed.
The problem: The premise may be flawed.
To gain some sense as to how McDonald's restaurants would fare under such scrutiny, The Wall Street Journal hired one of the nation's largest mystery-shopping companies, Dallas's Feedback Plus Inc. Its mystery shoppers visited and prepared reports on 25 McDonald's restaurants in four markets: Dallas, Chicago, New York and Los Angeles.
McDonald's performed well.
The overall score of the 25 McDonald's was about 81.9%, compared with an 80% average for all restaurants -- fast-food and sit-down -- that are evaluated by Feedback Plus. To provide some comparisons with the 25 McDonald's, Feedback Plus also evaluated eight of Diageo PLC's Burger Kings (score: 80.1%) and four each of Wendy's International Inc. restaurants (score: 80.7%) and Tricon Global Restaurants Inc.'s Taco Bells (score: 77.1%).
A way-below-average score would have left McDonald's with enormous room for improvement. But this outcome raises the question of whether McDonald's could raise its performance to 90% or above. Of the 70 restaurant companies that hire Feedback Plus, very few boast average scores above 90%. And those that do are relatively small, especially compared with McDonald's.
Even if attainable for the giant chain, would a higher score boost its sales? Considering that the biggest challenge facing McDonald's is an overabundance of competitors and consumer choices, operational excellence could help the largest hamburger chain stand out. Not surprisingly, the mystery-shopping industry in particular argues that point. "If they raised their overall scores by a few percentage points, the sales impact could be huge," says Kelly Heatly, restaurant account executive at Feedback Plus and a board member of the Greater Dallas Restaurant Association.
http://interactive.wsj.com/articles/...1569132200.htm