McDonald's spent much of the '90s building hundreds of new U.S. restaurants, only to see its share of the fast-food pie shrink. Franchisees were unhappy, and domestic operating income wasn't even keeping pace with inflation. They're being more conservative and more thoughtful,'' says Irwin S. Kruger, who owns six stores in Manhattan. McDonald's, with 24,800 restaurants worldwide, has closed almost 200 poorly performing U.S. units. With new executives lured from companies ranging from Taco Bell Corp. to General Electric Co., the company is also starting to break from a past in which managers with a decade at McDonald's were considered new.
Franchisees say there's also a new respect for consumer research.
The company is using the data to help figure out when to discount. Starting in Florida and then on the West Coast, for example, store owners have responded to vigorous competition by selling burgers for less than the price of a candy bar on selected days. The chain is also experimenting with regional products. One, the bagel sandwich, will be available in about half of U.S. stores by midsummer. Containing meat, egg, and cheese, the bagel is an attempt to improve the Arches' appeal with adults.