Public loses taste for hamburgers

More shadows are gathering beneath the golden arches as bad financial news bites into McDonald's fortunes.

Dissatisfied customers and suspicion of beef products are putting the world's biggest burger chain under pressure.

McDonald's is embarking on the biggest revamp of its business in its 50-year history in light of bad financial news in Europe and America.

As American executives worry that a Big Mac no longer cuts the mustard and people are turning away from hamburgers, McDonald's is preparing to move into partner brands - Chipotle Mexican Grill, Donatos Pizza and Pret a Manger, a chain that makes sandwiches.

It is estimated that the new brands could add 2 per cent to McDonald's growth rate within a few years as the burger chain wrestles with a low stock price, slow growth and weak currencies that have battered revenue growth.

Mad cow disease and Britain's recent foot and mouth outbreak have turned customers off beef and, along with an ageing and increasingly health-conscious consumer base, McDonald's is finding it tougher to sell burgers.

It also has another problem: customers turning away in droves because they don't like the way they are treated. An internal company document obtained by the Dow Jones News Service said as many as 11 per cent of McDonald's customers worldwide are dissatisfied enough to complain on any given day.

Of these, 70 per cent are unhappy with the way their complaint is handled, leading to a sharp drop-off in custom, not to mention a lot of bad-mouthing to their friends.

The issue - almost certainly the result of hiring young, inexperienced workers and paying them too little to encourage them to stay long - was the subject of a conference at the McDonald's "Hamburger University" outside Chicago last month at which delegates were told the problem could be responsible for $750 million in lost sales every year.

"Most customers who have complaints do not share it with the restaurants - they just don't come back," Dow Jones quoted from the documents, posted on an internal company website.

McDonald's New Zealand spokesman Liam Jeory said sales here were "booming" and restaurants were undergoing a $25 million revamp.

He said the facelift was to give the chain "a totally consistent image" and to bring McDonald's into the "new century."