Necessity Still Breeds Ingenuity - Archive of SQUALL MAGAZINE 1992-2006

News and other Busyness

McDonald's Annual Report

Mickey and Ronald sign pact for world domination

Squall 15, Summer 1997, pg. 14.

THE NEW ANNUAL REPORT published by the McDonald's Corporation in April, is of course a high gloss affair.

The front cover photograph depicts a three-year old child standing next to a box of chips, whilst a double-page colour spread has Ronald McDonald and Mickey Mouse celebrating an exclusive 10 year marketing partnership between McDonald's and Walt Disney:

"What better cause for celebration than the unique global alliance between family brands like The Walt Disney Company and McDonald's Corporation? When you bring together Ronald McDonald and Mickey Mouse - two of the world's favourite characters - the winners are children and families everywhere."

The report also celebrates the global expansion of the golden arches, announcing record "systemwide sales" of $30 billion and trumpeting the fact that McDonald's now have their tentacles in 101 countries worldwide, having invaded 12 new countries in 1996.

Japan heads the league table with 2,004 burger bars, Germany comes second with 743, whilst the UK is in third place with 737. The level of expansion is also indicated by comparing the figures with those of 1991, when Japan had 865, Germany 391 and the UK 431. The report also announces the Corporation's intention to "emphasize aggressive marketing" in the coming year.

The director's report attempts to rosily reassure shareholders that the drop in McDonald's share of the US burger market is but an anomaly: "In the current competitive US environment, some of our franchisees were dissatisfied with the sales and profit trends in their businesses in 1996", but "they are still proud to be part of the McDonald's system".

Financial observers suggest that the US burger market is now saturated, so that further expansion will now be sought globally whilst their sliding US position will be addressed with market consolidation.