McDonald's

McDonald's Is Doing Something It Hasn't Done in 40 Years

McDonald's Is Doing Something It Hasn't Done in 40 Years

McDonalds in Copenhagen.

For the first time in 40 years, McDonald’s is slimming down in the U.S.

The fast-food chain intends to shutter more restaurants than it will open this year, marking the first time since at least 1970 that the company has reduced its U.S. store footprint, according to an Associated Press review.

McDonald’s didn’t specify by how much its total 14,300-store count would decline, but a spokeswoman said it would be “minimal.” The chain closed 350 poorly performing stores in Japan, the U.S., and China earlier this year on top of the 350 planned store closings globally.

McDonald’s has been on a mission to turn around its faltering business as global sales continue to decline. The fast-food giant has been losing customers to more popular fast-casual restaurants such as Chipotle, and a new type of “better burger” chain like Five Guys Burgers.

New CEO Steve Easterbrook, who took over in March after one of the worst years in McDonald’s history, is implementing a turnaround plan that he hopes will fix the struggling hamburger chain. The plan includes a new organization structure, with plans to cut nearly $300 million in costs per year and relying more heavily on new franchises.

It’s not unusual for stores to rein in their footprint (and eliminate weak stores) when they are trying to reset for future growth. Similar moves were made by Starbucks in 2008 when CEO Howard Schultz closed hundreds of U.S. cafes, the Associated Press pointed out. The coffee company has since returned to a healthy sales growth and gotten back to expanding its brand reach.


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