CHICAGO -- The slow economy wasn 't the only topic of discussion at the NRA Show in May, but it certainly colored everything that was addressed during the four-day National Restaurant Association event in Chicago. So when asked how McDonald's is maintaining and even growing sales, CEO Jim Skinner said, "We have everyday affordability in every country in the world.… No matter how good the experience is, if you don't have an affordable menu, you can't make it."
Similarly, restaurant industry veteran Jim Sullivan, the speaker in a session titled, "Fundamentals: Seven Ways to be Brilliant [image-nocss] at the New Basics of Profitable Foodservice," updated his presentation to include "seven ways to grow in uncertain times."
"If [consumers] are only eating out three times a month instead of five, make sure they're coming to you for those three," Sullivan told the crowd in his well-attended session. Among Sullivan's key tips for succeeding in uncertain times were:
Don't lose your current customers. Take market share away from the competition. Enter new markets. Minimize complexity in operations. Make hiring the most important decision. Realize that getting better at more things produces exponential results. Become brilliant at the basics.These are many of the same things Skinner, who was the keynote speaker on the second day of the event, which ends today, went through over the past five years after McDonald's hit a financial low point.
"In 2002, we had a perfect storm.… Our stock was at $12.13 a share, the lowest it's ever been," he told the crowd of about 500 restaurateurs and suppliers on Sunday. "So we created a financial discipline plan.… It was about getting better rather than getting bigger, which was our operation plan prior to that. Five years later, we are in a period of our strongest results ever." Yesterday afternoon, McDonald's stock stood at $60.75 a share.
"We worked very hard on our core, such as our dollar menu," Skinner said about the company's turnaround, "then we developed our specialty sandwiches to bump up against those sold by the fast-casual restaurants."
The economy also was reflected on the tradeshow floor of the conference. While booth space on the 605,000-square-foot show floor was sold out, there were some noticeable absences, including McCain Foods Ltd., a maker of french fries based in New Brunswick, Canada. Similarly, Tyson Foods Inc. of Springdale, Ark., ran its booth without offering samples, filling it, instead, with signs that read, "We have more than 200 food products; we just don 't have them here," among other messages.
"We decided against serving food this year because of the increasing cost," a Tyson spokesperson told the Chicago Tribune.
Nearly 2,200 companies exhibited at the annual tradeshow, according to the NRA. The restaurant industry brought in $558 billion in sales in 2007.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.