Unhappy meal: McDonald’s CEO steps down as sales decline

Fast-food giant McDonald’s replaced president and chief executive Donald Thompson on Wednesday, after the company turned in another poor quarter of sales and earnings last week. The firm behind the world-famous Big Mac had been under pressure from investors to take swift action after seeing the business weaken in the past year under Thompson, one of the United States’ top African-American executives and with 25 years at McDonald’s. The board of directors said it had chosen senior executive vice president Steve Easterbrook to replace Thompson, voicing confidence he “can effectively lead the company to improved financial and operational performance.” The decision came five days after McDonald’s reported a 2.4 per cent decline in revenues last year and a hefty 19 per cent drop in earnings per share, with falls in store traffic in all regions.

It’s tough to say goodbye to the McFamily, but there is a time and season for everything. I am truly confident as I pass the reins over to Steve that he will continue to move our business and brand forward.

Outgoing McDonald’s CEO Don Thompson

The burger chain has been challenged by changing consumer tastes, agile new fast-food chains and a slump in sales in China and Japan after supplier issues sparked a scare over food safety. After aggressively investing and expanding in numerous markets to fight back against rivals, McDonald’s said last week that it would reduce capital investment and cut back on store openings this year “to regain business momentum” and improve profitability. The company is reducing the choices on its menu, cutting back to 11 burger-fries-drink combinations from 16, and reducing other offerings. But despite its growing woes, McDonald’s remains the world’s largest burger chain, with $27.4 billion in revenues last year, and net income of $4.6 billion, down 15 per cent from 2013.

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