This post is part of the On the Margin blog.
McDonald’s Corp. is the largest restaurant chain on the planet, in terms of revenue, and nobody else is particularly close.
In the U.S., the chain has 14,000 locations that average $2.5 million — one of the largest unit volumes in the quick-service restaurant business. Its total system sales are more than twice the second largest chain.
Given its low price point, McDonald’s serves a massive number of customers. Billions served indeed.
And yet, on Monday, yet another consumer survey put McDonald’s dead last.
The chain finished last among all limited-service chains, as well as all full service chains, in the American Customer Satisfaction Index released Monday. McDonald’s finished this poorly despite a 3-percent increase in its ACSI score. What’s more, it was five points below the next lowest chain, Jack in the Box.
This is not anything new. In our own Consumer Picks survey this spring, McDonald’s finished third from the bottom. Even in its seeming strength — value — the chain finished middle of the pack among chains rated.
It would be easy to use these results as a warning to McDonald’s that the chain has to fix its perception with consumers.
And, to be sure, finding a way to improve the overall perception of its menu probably is the best strategy for McDonald’s to generate more consistent sales growth. Yet its ubiquity probably means it will never rate high on many of these surveys.
Consumer surveys can provide good insight into the views of chains by consumers. The direction of these surveys can point to the direction of a chain’s sales. “Customer satisfaction becomes a precursor with financial performance,” ACSI Managing Director David VanAmburg told me in an interview. “People who are not satisfied with the performance of their restaurant vote with their feet. Revenues start slipping, margins start slipping and investors take notice.”
Indeed, McDonald’s score this year increased 3 percent, in line with its sales improvement in the past couple of quarters.
At the same time, however, other issues can influence the views consumers have with certain chains. With Starbucks, consumers’ belief that the chain’s prices for coffee are too high has deflated its customer satisfaction score despite strong performance in recent years.
McDonald’s has to be doing something right. Even after three years of sales declines it remains a giant in an otherwise hotly competitive market. Customers clearly like its convenience or its value or its food or, most likely, some combination of the three.
But it also gets a lot of heat simply because it’s the biggest chain, and also because it’s the biggest quick-service restaurant. So people give it poor marks to reflect their general opinion of the sector.
The company also takes a lot of criticism aimed at the restaurant business as a whole. So, when labor activists want the business to pay workers more, they target McDonald’s first.
Of course, customers may also have some McDonald’s fatigue, and they may also be genuinely dissatisfied with what they get from the concept. But for now, at least, that disillusionment isn’t enough to put a dent in the chain’s dominant position in the US market.