How McDonald’s Won the Recession
I find McDonald’s a kind of fascinating story, and Daniel Gross’ article on how they prospered through the recession is very interesting. The part I have something to say about, though, is the last part:
The question now for investors is whether McDonald’s can survive the recovery. When people feel more flush, will they still stop by? The growth in same-store sales in the United States has moderated a little in recent months—up only 2.6 percent in the United States in July compared with 6.1 percent in April. And there’s a rising chunk of the population that has grown accustomed to eating healthier and better; my 10-year-old won’t touch a McDonald’s burger. Going forward, McDonald’s may face larger cultural barriers in the United States than in China.
There sometimes seems to me to be a rhetoric around fast food chains that implies that they want to serve unhealthy food to people. As if McDonald’s was a holding company that sold french fries as a loss-leader and made its real profits as a pharmaceutical company selling people cholesterol medication. The reality, though, is that successful fast food companies are very flexible and adaptable and sell all kinds of things around the world according to local tastes.
I think when the day comes that consumers genuinely want healthier meals, McDonald’s will probably be doing just fine selling them, just as they’re doing fine selling shrimp burgers in Hong Kong and a paneer salsa wrap in India. What’s more, doesn’t it actually seem really unlikely that people will start, deep down, wanting to eat healthier? For the vast majority of our species’ history, people were engaged in much more physical activity and needed to consume way more daily calories than modern people do. Historical people also lived with the constant threat of future food shortfalls, under circumstances where it made sense to eat what you could when you could because you could easily be underfed next month. That legacy creates powerful forces shaping our first-order preferences.