Food safety and organic trends put McDonald’s on defensive

The opening of McDonald's branch in Hanoi. Photo: trithuctre.vn

Newswire AFP stated that on last Thursday (June 7), McDonald’s announced yet another plan to cut an unspecified number of jobs as a part of its restructuring to save its business in the US and save $500 million.

McDonald’s spokeswoman Terri Hickey said, “With that in mind, we are putting into place a new US field structure that will better support our franchises and will ensure that McDonald’s continues on a path to being more dynamic, nimble, and competitive.”

Doubting that the US fast food giant may make similar moves in Vietnam, VIR contacted McDonald’s Vietnam, who failed to reply to e-mails.

Previously, in August 2015, McDonald’s also cut 225 jobs, including 135 jobs in its headquarters in Oak Brook city, Illinois and 90 jobs in its foreign branches.

The cut on personnel took place while McDonald’s general director Steve Easterbrook announced the plan to cut business costs by $300-million by 2017 and to restructure activities to keep pace with the changes in the fast food industry.

Scandals related to food safety

In late 2014, McDonald’s was hit by several scandals related to food safety and these issues have dented its reputation. For instance, in McDonald’s Japan, a human tooth was found in a customer’s French fry in August, and a child cut his mouth in December on a piece of plastic on a chocolate sundae.

Previously, McDonald’s Japan had to halt selling Chicken Nuggets after a customer found a strip of vinyl roughly 1.5 inches long in their order.

Afterwards, in early 2015, McDonald’s Japan apologised to its customers and vowed to ensure product safety.

The scandals had a marked impact on the revenue of McDonald’s Japan in 2015’s first quarter. Accordingly, revenue dropped by 34.5 per cent, resulting in a loss of $120 million.

Falling behind food trends

Instead of previous fast food standards, including reasonable prices and fast service, current fast food standards revolve around the origin of materials. Accordingly, people are becoming more health-aware and are picking fresh, organic food options. Meanwhile, McDonald’s is being regarded as the main cause of obesity in the US.

Riding on the modern food trend, its competitor and former subsidiary Chipotle has been focusing on developing a high-quality food system with fresh and organic materials at slightly higher prices.

While traditional fast food stores commonly serve hamburgers and fried chicken, Chipotle has a South American menu featuring barbecued meat and stewed potatoes. Chipotle has passed McDonald’s to become the US’ leading fast food brand worth $20 billion in 2014.

In 2014, according to a survey of 32,000 people by US’ magazine Consumer Reports, McDonald’s was listed among the top 20 food chains with the worst pancakes.