Case 14-2
McDonald’s Goes Upscale from Paris to Peoria
A Big Mac, fries, and … a cappuccino? These days, when consumers from Paris to Peoria go into a
neighborhood McDonald’s, [http://bi.galegroup.com/essentials/company/305566?u=tlearn_trl] they can
order meals made from fresh, locally grown produce and sip more sophisticated beverages. Of course, the
fast-food chain’s well-known hamburgers are still the main attraction, but it is not just the food that is
changing. The restaurants also look more luxe, some with sleek coffee bars and stylish armchairs that give
customers a comfy place to linger over their lattés.
McDonald’s plan to move upscale started in Europe, an area that accounts for nearly $4 out of every
$10 that the company earns. Only a decade ago, however, McDonald’s European sales were lagging as
local consumers fretted over the few healthy choices and turned up their noses at the frumpy décor. The
movement actually began in France, where people are famously particular about what they eat. “To make
McDonald’s and a Big Mac work in the country of slow food, we felt we had to pay more attention to
space and showcasing,” remembers Denis Hennequin, who was then in charge of McDonald’s in France
and now heads McDonald’s in Europe.
Hennequin and his team started by modifying the menu for local tastes, introducing salads, desserts,
and smoothies featuring fresh fruits and vegetables from French suppliers. They also cooked up new
twists on McDonald’s sandwiches, including cheeseburgers with French cheese and a hot ham-and-cheese
sandwich called the Croque McDo, the chain’s answer to France’s popular Croque Monsieur sandwiches.
To reinforce the idea that McDonald’s was doing things differently, the company invited consumers to
tour its restaurant kitchens and even meet with its produce suppliers.
The next step was to give McDonald’s restaurants in France an updated, upscale look to showcase the
more upscale menu and to invite consumers to savor the fast food. Hennequin set up a design studio in
Paris to develop nine different restaurant décors, ranging from interiors with sleek, simple lines and
neutral tones to colorful interiors with large pictures of freshly picked produce. In the new interiors, the
designers replaced McDonald’s usual bold red with a rich burgundy and toned down the glaring neon
lights for a more subtle look.
French consumers noticed the difference: sales at the McDonald’s restaurants with new menus and
interiors increased by nearly 5 percent. McDonald’s then began giving its other European restaurants a
menu and design makeover, a move that has boosted its sales growth in Europe by 15 percent. Now
McDonald’s customers in Lisbon can order soup for lunch or dinner while customers in London can settle
back into leather seats and use wireless Internet access. Reflecting changing lifestyles, McDonald’s is also
stepping into the coffee culture in a big way. In Germany, where Starbucks is not yet a major force, the
McCafé coffee bars located inside McDonald’s restaurants dominate the market.
McDonald’s has also brought its upscale movement to America, where the cappuccinos, iced coffees,
and flavored teas served in its 1,000 McCafés are attracting many consumers who otherwise would have
gone to nearby Starbucks outlets. An ever-growing menu of old favorites and newer alternatives like
salads and wraps gives McDonald’s customers more choices than ever before. Some of its U.S.
restaurants now feature amenities such as big-screen TVs and fireplaces as well as wireless Internet
access, letting customers relax and enjoy themselves if they have the time. “We really wanted to make
sure that we were the customers’ destination of choice,” notes the chief operating officer, adding that this
goal means providing “convenience, comfortable seating, [and] great locations, along with value and the
right offerings.”
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Case Questions
1. How do the changes that McDonald’s has made to move upscale address changing consumer
lifestyles?
2. What values seem to be reflected in the changes that McDonald’s has made?
3. What aspects of personality do you think McDonald’s marketers should pay particular attention to as
they plan future menu and restaurant changes?