McDonald's in the UK: Strategies for Sustainable Growth

SWOT Analysis

Strengths

• Global Strategy – “Think Global, Act Local”: McDonald’s operates in over 100 countries, tailoring menus and marketing strategies to suit local tastes. In the UK, it offers items like the Bacon Roll and Spicy Veggie Wrap, catering to local palates.
• Market Leader: McDonald’s holds the largest market share in the global fast-food sector, with over 1,400 outlets in the UK as of 2023.
• Strong Brand Recognition: Ranked 8th in Forbes’ Brand Relevance Index, McDonald’s is a household name synonymous with consistency and affordability.
• Strict Quality Control: A robust supply chain ensures consistent product quality across all locations.

Weaknesses

• Limited Product Innovation: McDonald’s has been criticized for slow responses to food trends, such as veganism and organic diets.
• Franchise Network Issues: Variability in service and quality across franchises affects customer experience.
• Logistics and Transportation Challenges: McDonald’s faces occasional disruptions in its UK supply chain due to Brexit and fuel shortages.
• Low Product Differentiation: Many items are perceived as generic, reducing the incentive to choose McDonald’s over competitors.

Opportunities

• Expansion into Emerging Markets: Joint ventures in Asia and Africa offer growth potential.
• Health-Focused Product Lines: Launch of the McPlant (plant-based burger) in the UK is a strategic response to rising veganism.
• Tech-Enabled Ordering: Investing in mobile apps and self-service kiosks enhances customer convenience and reduces wait times.
• Green Packaging Initiatives: The UK led the way with paper straws and fully recyclable packaging.

Threats

• Strong Competition: Rivals like Subway, Pret A Manger, KFC, and Greggs continuously challenge McDonald’s market position.
• Health Awareness: A UK Public Health England campaign encouraging reduced fast-food consumption has impacted customer choices.
• Cultural Sensitivities: Diverse diets and food taboos require careful product localization.

Corporate Strategy

Supply Chain Management

McDonald’s UK sources ingredients from over 17,000 British and Irish farms. For instance, all eggs used in the UK restaurants are free-range, and milk comes from British dairy farms. The company uses a “farm-to-fork” traceability system to ensure quality and safety.

The FIFO (First In, First Out) inventory method minimizes waste and ensures freshness. During Brexit-related supply disruptions in 2021, McDonald’s temporarily removed milkshakes and bottled drinks from menus due to a lack of drivers—highlighting the need for resilient logistics planning.

Leadership and Cost Strategy

McDonald’s uses localized pricing strategies. For example, a Big Mac in London costs approximately £4.59, compared to just £2.40 in India. This localization allows the brand to maximize market penetration while adhering to regional economic standards.

Business Strategy

Product Strategy and Localization

McDonald’s has adapted its UK menu with items like the McPlant, developed in collaboration with Beyond Meat. In 2019, it introduced Wrap of the Day, which became highly popular among office-goers.

Price Bundling like the Saver Menu (e.g., £1.99 for a cheeseburger and small fries) encourages larger order volumes. Seasonal items like the Festive Stack tap into British holiday traditions.

Branding and Partnerships

Strategic alliances, including sponsorships with the Premier League and FIFA World Cup, keep McDonald’s front-of-mind for sports fans. It also partners with charities like FareShare and Ronald McDonald House Charities to boost social responsibility credentials.

Human Resource Strategy

McDonald’s was the first UK company to offer a Level 2 Apprenticeship in Hospitality in partnership with City & Guilds. It has over 20,000 apprenticeships completed in the UK.

Employee perks include:

• Flexible scheduling
• Opportunities for promotion from crew to management
• Bonuses and “Employee of the Month” recognitions
• Free meals and holiday pay

Functional Strategy

Quick Service

The UK average wait time at McDonald’s drive-thrus is just 3 minutes, a competitive benchmark in fast food. Innovations like digital kiosks and click-and-collect apps help maintain this efficiency.

Cleanliness and Hygiene

Mystery shopper reports, internal audits, and real-time feedback help maintain high hygiene standards. During COVID-19, McDonald’s UK implemented over 50 new safety procedures including contactless delivery and table service.

Management and Employee Performance

Shift managers receive leadership training and are responsible for KPIs like speed of service, cleanliness, and customer satisfaction. Employees use handheld devices to take orders during rush hours, improving throughput and accuracy.

Marketing Strategy

Sales Promotion

Contests like “Monopoly at McDonald’s” generate excitement. In 2022, the Monopoly campaign increased UK store visits by 12% during its run.

Public Relations

McDonald’s UK has emphasized transparency by publishing sourcing information online. Campaigns like “Follow Our Foodsteps” allowed customers to trace the journey of their meal from farm to tray.

Direct Marketin

Personalized promotions via the McDonald’s App offer discounts like “£1.49 McChicken Sandwich” on Mondays. Push notifications based on location and buying history increase footfall.

Personal Sellin

Employees are trained to engage customers courteously within a tight time window. In-store surveys and touch screens provide instant feedback, influencing menu and service improvements.

Advertising

Billboards showcasing the “Just the Cheese” campaign, TikTok collaborations with UK influencers, and cinematic TV ads—such as the 2020 “Inner Child” Christmas ad—help build emotional connections with audiences.

Transformation of the UK Market

Challenges (Pre-2003)

• Declining Same-Store Sales: Negative growth due to stale menus and poor service.
• Franchisee Dissatisfaction: Poor communication and support weakened franchise relationships.
• Negative Public Perception: McDonald’s was synonymous with “junk food” and poor employment.

Strategic Interventions

• “Plan to Win” Strategy (2003): Focused on food, people, place, price, and promotion.
• Healthier Menu: Salads, fruit bags, and organic milk introduced. UK was the first to offer fruit in Happy Meals.
• Store Modernization: Introduction of digital menus, WiFi, USB ports, and revamped interiors.
• Workplace Reform: Flexible family jobs, internal promotions, and apprenticeships transformed the image of a “McJob.”

As a result, McDonald’s UK witnessed a significant turnaround. By 2020, it had a customer satisfaction score of 82% (YouGov), and its UK revenue exceeded £1.5 billion annually.

Challenges faced by McDonalds in UK

Unhappy Franchisees – Poor Network

Declining per store sales resulting in unhappy franchisees. This is an issue for the company since it creates tensions between the franchisees and the company. These tensions can cause major disruptions in the well functioning of McDonald's. A low or even negative per-store sales can also have a negative effect on future franchisees applications. The main reasons behind this trend can be attributable to McDonald's expansion growth policy in the mid 1990's, the menu and the decline in the standards of quality, service and cleanliness.

Menu Items

A major domestic challenge for McDonald's is the menu. it is believed that the domestic per-store sale decrease is partly due to older customer drifting away. So McDonald's tried to target this segment of the market by introducing its first "grownup taste" sandwich. Segmentation was introduced in order to manage the different customer needs by identifying homogenous market segments. However, McDonald's attempt failed. Furthermore, the decline in growth can also be attributable to the shift in the public opinion towards eating healthy food.

Standards of quality, service and cleanliness

Another reason for the decline in same-store sales major can be related to the fact that the standards of quality, service and cleanliness, which is one of McDonald's core competencies, were declining. a survey in 1995 gave poor results for the company in terms of food, service and cleanliness. In addition, a 2001 study ranked McDonald's among the poorest-performing fast-food chains with 11 percent of customers dissatisfied because of slow service, wrong orders, dirty stores, and rude employees. Since McDonald's jobs are not very appealing, the pool of applicants that remained may not have been very competent and not as friendly as they should have been.

Localization Challenges

One of the reasons might be that McDonald's don't seem to have done an extensive market research. They need to search for what the customer want and need and understand why it is maybe the case that older customer are not eating anymore at McDonald's. This could be done through surveys, focus groups and interviews. However, McDonald's could use some consumer-oriented strategies to deeper consumer involvement. One of the major problems was consumers‘ perceptions about McDonald‘s as a promoter of obesity.

Competition

The company also faced some tough competition from fast food chains like Subway7 and Wendy‘s International, Inc. (Wendy‘s), and other outlets like Starbucks Corporation (Starbucks) in the UK.

Factors/Strategy responsible for change in the situation

• In order to enhance its brand reputation in the UK and to improve sales, McDonald‘s focused on four core areas — food, employees, the environment, and communities.
• It introduced several new items on the menu, revamped restaurants, launched community programs, and introduced accredited qualifications and apprenticeships for its employees in the UK.
• In 2003, McDonald‘s adopted the ‘Plan to Win‘ strategy in the UK market in order to increase sales. As part of this strategy, McDonald‘s offered variety and value and tastier food besides improved service to customers.
• To cater to the health-conscious customers, it introduced healthier foods such as salads and provided nutritional information about its products on food packages
• The fast food chain launched an affordable breakfast menu along with premium coffee across its outlets in the UK.
• To attract customers, McDonald‘s redesigned its stores in the UK and introduced modern technology to compete in the highly competitive UK fast food market.
• Instead of adding new stores, it closed down stores which were not performing well and those that lacked modern interiors.
• The company also had to work hard on the Human Resource (HR) front as it tried to get rid of the negative perceptions associated with working at McDonald‘s in the UK.
• Price reviews were undertaken at McDonald‘s on a regular basis to ensure that both customers as well as suppliers benefited.
• To erase its image of a junk food provider from the minds of the customer, it provided nutritional information about every product it sold at its restaurants.
• According to the company, it had to stop offering the super size option because it was not popular among customers and accounted for less than 0.1% of all UK sales.
• In 2003, McDonald‘s UK introduced fruits as part of its Happy Meals for children. The UK was the first market in which the burger giant was introducing fruit bags as part of its menu. It also introduced organic milk on the menu.
• Besides the menu, McDonald‘s redesigned the traditional look of its restaurants in the UK to give them a café-styled modern look.
• McDonald‘s also launched incentives for its employees in the UK such as family job-sharing schemes. To dispel the perceptions associated with ‘McJobs‘ and to enhance its employer brand image, McDonald‘s provided its employees with the opportunity to advance in the organization and offered comprehensive training programs to all staff levels and promoted them from within.

Conclusion

McDonald’s remarkable recovery and success in the UK underscore the power of strategic alignment across corporate, business, and functional levels. By understanding customer needs, investing in innovation, and improving employee satisfaction, the brand has not only remained competitive but has also become a beloved part of British food culture.