Introduction
McDonald’s is one of the most recognizable fast food chains in the world. However, in recent years, the company has been closing locations due to a variety of reasons. In this article, we will explore why McDonald’s has been closing locations and what this means for the future of the company. We will also discuss some of the healthier alternatives to McDonald’s that you can choose instead.
McDonald’s Has Been Closing Locations For This Reason
McDonald’s has been closing locations across the United States for a variety of reasons. The fast-food giant has been struggling to keep up with changing consumer tastes and preferences, as well as increased competition from other fast-food chains. Here’s why McDonald’s has been closing locations.
Changing Consumer Tastes
One of the main reasons McDonald’s has been closing locations is due to changing consumer tastes. Consumers are increasingly looking for healthier options when it comes to fast food, and McDonald’s has been slow to adapt. The chain has been introducing healthier options, such as salads and wraps, but it hasn’t been enough to keep customers coming back.
Increased Competition
Another reason McDonald’s has been closing locations is due to increased competition from other fast-food chains. Chains such as Chipotle, Panera Bread, and Chick-fil-A have been gaining market share, as they offer healthier options and more customization than McDonald’s. This has caused McDonald’s to lose customers, leading to the closure of some locations.
Rising Costs
Finally, McDonald’s has been closing locations due to rising costs. The chain has been struggling to keep up with rising labor costs, as well as the cost of ingredients. This has caused McDonald’s to close some locations in order to cut costs and remain profitable.
McDonald’s has been closing locations for a variety of reasons, including changing consumer tastes, increased competition, and rising costs. The chain has been struggling to keep up with changing consumer preferences and increased competition, leading to the closure of some locations. However, McDonald’s is still a popular fast-food chain, and it is likely to remain so for the foreseeable future.
For the past few years, McDonald’s has been shrinking in size. But strategically cutting hundreds of restaurants loose has done wonders for the fast-food titan’s bottom line.
Since it began franchising its locations in 1955, McDonald’s has been a poster child for savvy business and American entrepreneurship. And this year’s report on the state of the quick-service industry, published by Technomic, shows that America’s #1 fast-food chain continues to shrewdly maneuver the challenges of the ever-shifting industry landscape.
Related: 8 Worst Fast-Food Burgers to Stay Away From Right Now
At a glance, it may seem like McDonald’s has struggled with post-pandemic recovery, considering the chain had closed 239 restaurants in 2021. However, the closures didn’t impact its sales growth, but rather boosted it, according to Restaurant Business.
Currently, the average McDonald’s location generates $3.4 million in revenue per year, which is among the highest numbers in fast food. By shrinking its U.S. footprint, the chain was essentially able to increase sales at its remaining locations. Underperforming units bringing its store averages down, like those located inside Walmart stores, were ones that got the boot.
Restaurant Business reports that in the past five years, the chain has lost about 5% of its total locations, but its average sales per restaurant have risen by 32%.
Instead of mass traffic, McDonald’s is now targeting customers willing to spend more per restaurant visit. The chain has introduced more premium menu offerings, like the new chicken sandwiches, and has been raising its prices in order to cover a rise in labor and commodity costs.
“We are still seeing [6% increases] and that’s pretty much the level we expect for the full-year 2021 over 2020 . . . And that’s really to cover both labor cost pressures and commodity cost pressures,” said CEO Chris Kempczinski, in response to an investor question about menu prices in 2021.
Additionally, hugely successful celebrity meal collaborations have proven to be a winning move with McDonald’s younger audience—boosting Mickey D’s success during the pandemic even further.
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