Strategy

McDonald's: This arch is golden

Left for dead just a few years ago, McDonald's is thriving in changing times.

Gallery: Ready for these trends?

It was only seven years ago that Phil (The Supermarket Guru) Lempert was predicting the “beginning of the end for fast food,” and the share price of McDonald’s was in a nosedive. But in the past few years the chain has managed to shed its image as public enemy No. 1 and come back stronger than ever — posting sales growth through the recession and into the recovery, including a massive 10% year-over-year boost in net profits in the third quarter of 2010.

By 2004, McDonald’s had become a whipping boy for the media in the wake of concerns over a national obesity epidemic. The company had to change extremely negative perceptions popularized by the movie Supersize Me and the book Fast Food Nation. They responded with their “Balanced, Active Lifestyles” campaign and introduced better-looking salads and white-meat chicken McNuggets.

“One thing [customers] told us is that variety is important to them, not only in terms of menu offerings, but also sizing options,” says John Betts, CEO of McDonald’s Canada, who credits the chain’s rebound to “our ability to evolve with changing tastes.” It seems the recipe for resurrecting the all-American burger chain was realizing they could stick with what works — like their famous special sauce — while adapting to more weight-conscious times.