business news in context, analysis with attitude

Great piece on, which writes that now that the recession seems to be coming to an end, “it's time to start looking at which companies, institutions, and individuals thrived during this grim period. In the harsh downturn that began in December 2007, success was redefined – flat became the new up, and muddling through became a triumph … in a recession that hit all rungs of the income ladder and ravaged the wealthiest consumer markets.”

Slate’s Daniel Gross nominates McDonald’s as one of the recession’s big winners – growing total sales, opening new stores and expanding its same-store sales figures. Among the factors that worked for McDonald’s:

• “In 2008, after a decade of relentlessly trading up to higher quality (read: more expensive) consumer goods and services, Americans began to trade down with a vengeance.”

• “In a recession, people eat out less and at home more frequently. And when they eat out, they eat at cheaper places. McDonald's is so cheap, efficient, pervasive, and convenient that it was a viable alternative to casual restaurants like Ruby Tuesday and to cooking at home.”

• “McDonald's ran plenty of bargains and distributed gazillions of coupons … but it also spent money promoting a higher-margin good that could appeal to a new class of trading-down consumers: coffee. As consumers jettisoned their $4-a-day latte habits, Starbucks retrenched. But McDonald's expanded its java offerings.”

• In additional, McDonald’s thrived outside the US because in many countries it is an aspirational brand …and that served it well.

Gross concludes, “McDonald's success can be chalked up to a combination of luck—which is the residue of smart planning—and savvy moves.”
KC's View:
While the Slate piece didn’t mention it in any great detail, the company also was well-served by its move to both a healthier and more diverse menu. It isn’t exactly health food, but the broader options made parents feel less guilty about taking their kids there, and actually offered them foods they didn’t feel bad about eating themselves.

All in all, smart moves by a smart company…which also survived some tumult in upper management to create a real success story.