"Food for Thought" from McDonald's and 7-Eleven

Recent strategic changes by two global firms – McDonald's and 7-Eleven – provide good reminders for us all. Each business is making news by its focus on what they are known for. 

For 7-Eleven, that would be convenience and low prices. Granted, it is still a habit for many to stop at the corner store on the way to and from work, school and play. But for 7-Eleven to remain relevant, it needed an updated definition of “convenience” for its best customers: Millennials. 

Their research revealed that today, people are eating five and six times a day; over 40% of adults are eating alone and on-the-go. So 7-Eleven expanded its private label brands into portable, snack-sized “healthy and fresh foods”, geared especially to their Millennial shoppers.

• Their Go!Smart brand offers an array of fresh foods especially appealing to women shoppers (small portions of turkey chili and cornbread, kale and quinoa salads, hummus, all labeled with nutritional info).
• Their branded items also include gourmet nut and fruit snacks.

So far, it has been a winner! Sales of their private brands have grown smartly (30% in both 2015 and 2016). Since over 50% of their customers are Millennials – who now are old enough to buy beer and wine – the future looks bright as well. 

7-Eleven: Updated, but back to its basic convenience premise.


Similarly, McDonald's is returning its focus to delivering what it’s known for. In their case, of course, it is burgers and fries.  At low prices, from clean stores, and fast. (Oh yes, Egg McMuffins - how about all day long?)

Through their research, they discovered that fewer people were coming into their stores each year. Definitely not a recipe for success! 

Their new goal: “A better McDonald’s, not a different McDonald’s.” 

• They are simplifying the menu, to reduce the complexity of ordering and preparing (saving costs and time.) 
• They still offer choices to the customer. But not of different items (wraps? salads?), but more choices about the burgers. 
• Their focus is on what customers expect and want when they go to McDonald's. “You want fries with that?” 

Ahh yes. Back to your roots. The value of going back to the basics of what you are primarily known for. 

So, once upon a time...What were your stores known for?

• What about your stores do customers really know and love? 
• Does that still matter to today’s customers? 
• If yes, how do you make it even better for that customer?
• And then, Get cracking!

McDonald's Remodels - Again! (And for WHICH Customer?)

You probably saw the news. McDonald's is launching a $1 Billion "makeover" of their stores.

The remodeled restaurants will replace bright reds and yellows with subtle colors. They can feature flat-screen TVs, lounge chairs and electric fireplaces. They also are adding free Wi-Fi in most of its U.S. restaurants. Thanks to "seating zones", customers who want to linger will be separated from those who want a quick bite.

What does this mean - or matter - to independent retailers? Simply this: heightened expectations!

When was the last time your store was remodeled? Or, put another way, how many fast-food franchises in your town have been remodeled since your last update? If the price points on your merchandise are somewhere north of a Big Mac, but your store's look places you squarely in the Bush Administration, it may be time to reconsider how you are re-investing in your business. The customers expect no less!

Will McDonald's Remodel Chase Away Families?
Some observers have assumed that this makeover is meant to appeal to laptop-toting workers, and worried that it would drive away the families-with-young-children who depend on McDonald's as a reliable place for food their kids will eat. After all, as her kids run around, how many scowls from someone hunched over a laptop can any mom endure?

Our view is that this remodel is focused on a different market segment: teenagers! Think how Starbuck's has become a cool place for teens to hang out. What if McDonald's could attract them back? Offer a more "grown up" atmosphere, flat screen TVs, Wi-Fi for their texting - and those fries - might McDonald's become a cool place for teens?

The "Theater of Retail"
The "look" of your store says a great deal. It IS an arms race, no question. Once you accept that you need to remodel with some frequency, be certain to keep focused on that customer you most covet. Then make your store a place where that shopper wants to spend her time (and her money!)