If McDonald's (MCD) has its way, the three R's might end up being reading, writing and Ronald McDonald.
That's because the fast-food giant is planning to refocus on marketing to children and families in response to a serious problem on its plate. Thanks to changing tastes, the fast-food chain has suffered seven straight months of declining U.S. sales, with parents increasingly opting for rivals' seemingly healthier meals.
Its ambitious plan to polish the tarnished golden arches, as revealed in an investor conference call this week, involves a push toward getting families and kids back in its restaurants, with the chain's U.S. president telling investors that the company will "start with mom and we will be helping her to feel great about McDonald's -- whether it's McTeacher's Nights, sponsoring kids sports, being a visible partner in local initiatives."
Given that America is facing an obesity epidemic, involving McDonald's in schools and in children's sports events is "a bad plan for children's health," Sriram Madhusoodanan, an organizer at Corporate Accountability International, told CBS MoneyWatch. "This is really about McDonald's using an institution that parents and children trust -- our teachers and schools -- to provide an additional veneer of healthfulness."
Of course, McDonald's has marketed to children for decades, with today's parents having grown up with Ronald McDonald, the Hamburglar, and other characters. But parents and consumer advocates are increasingly asking questions about the appropriateness of using a clown to market unhealthy food such as fries and burgers to children, with some unsuccessfully asking the chain to retire the character. For its part, McDonald's has focused on providing healthier options to children by adding fruit and low-fat yogurt to its Happy Meals.
Even with the changes, McDonald's has been losing families to competitors, with parents seeking healthier options such as Chipotle's hormone-free beef. Only 5.1 percent of McDonald's customers include families with children between 12 to 17 years old, compared with 7.7 percent for the quick-service restaurant industry as a whole, Crain's Chicago Business noted in September. The biggest slice of McDonald's customers eat their Big Macs alone, with solo diners making up almost 41 percent of its base, or about double the industry's percentage.
That may explain why McDonald's executives are desperate to woo families back to the Golden Arches. Getting families to turn to Mickey D's for dinner may not only help revive the company's fortunes in the near-term, but help stave off further declines by reaching out to the next generation of consumers.
But targeting schools may simply backfire, noted Madhusoodanan. Consumers are increasingly opting for rivals because they are seeking healthier options. By sponsoring children's sports teams or entering schools, McDonald's may show parents that it's "increasingly out of step with the public climate."
McDonald's said its plan to sponsor kids' sports team and to refocus on McTeacher Nights "are positive actions that benefit families and communities," spokeswoman Lisa McComb wrote in an email. "Commentary to the contrary is uninformed and inappropriate."
She added, "As a family company, McDonald's also takes our responsibility to children and families very seriously and we are proud that we offer food choices that fit within a balanced diet."
McTeacher Nights have come under criticism, as well. The program asks teachers to work at a McDonald's, with the fast-food restaurant giving 20 percent of the profits from that event for teachers who pitch in. Teachers have called the events demeaning, while Corporate Accountability International says the events often raise only $1 per student and amount to "free labor for McDonald's."
McDonald's isn't only relying on marketing to kids to revive its waning fortunes. The chain will also trim its menu, and may change some ingredients to get away from the perception it serves junk food.
But getting families back inside its doors may prove tougher than a few tweaks, especially given that many aren't lovin' the chain's burger-heavy menu.