But the fast food giant has clearly turned a corner. With global sales up 8% last month compared to 2006, McDonald’s said yesterday that it would increase its dividend by 50 %, and return up to $17bn to shareholders by 2009. Not surprisingly, its share price is now approaching an all-time high.
It’s come a long way since ‘Super Size Me’. Vilified for its unhealthy food and aggressive behaviour, McDonald’s had become everyone’s favourite scapegoat for all that was wrong with the world (globalisation, obesity, corporate influence, the extinction of the dinosaurs), while the McJob had become a byword for the drudgery of unskilled labour.
And with the company apparently too busy opening new restaurants to look after the old ones, customers were deserting in droves to rivals offering healthier food in a slightly less dingy environment.
But the turnaround plan it launched in 2003 has brought the chain back from the dead. It stopped opening new outlets and cleaned up the old ones; changed its menu to include more healthy options and went big on coffee – the chain now serves up an award-winning brew that is almost a third cheaper than the exorbitantly-priced milky nonsense on offer at Starbucks, and is starting to eat up market share in the US.
Churning out cash is also a great way to get activist shareholders off your back. William Ackman of Pershing Square Capital Management, who owns a 1.6% stake and has been pressurising the board to release more shareholder value, is apparently ‘delighted’ by the dividend (possibly because it leaves him about $3m better off). HSBC take note.
Now all McDonald’s needs to do is crack on with that campaign to get ‘McJob’ excised from the dictionary…