Former McDonald's CMO: Most Of The Seeds Of Destruction At McDonald's Were Planted Under Jim Skinner

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Although McDonald's Corporation MCD surged on the announcement of CEO Don Thompson stepping down.

The surge is most likely temporary, though, as the headwinds facing the company are too strong for it to cover. With comp sales continuing to slump, analysts and industry veterans fear that things will only get worse for the company.

Former McDonald's CMO Larry Light was on CNBC Wednesday to discuss why McDonald’s has gotten off track and what it must do to get back on track.

What's Thrown McDonald's Off Track?

“They are so obsessed it seems with Chipotle and with Panera and with similar so-called 'casual dining.' But they should be asking the question, 'Why is Burger King growing; why is Wendy’s growing; why is Popeyes growing, why is Chick-fil-A growing?'

“Focus the business you are in versus focusing on the business you are not in. And I think that obsession has gotten them off track and will continue to get them off track,” Light said.

Related Link: Unusual Options Activity In McDonald's

Should McDonald’s Add Or Subtract Menu Items?

“I think that McDonald’s situation is different,” Light replied. “The menu exploded, because they were so obsessed with everything outside their category.

“They kept on adding to the menu without subtracting from the menu. I mean, many years ago when we worked on the turnaround, we had a decision rule: for every item you add, you have to subtract something. Otherwise the menu explodes.”

Related Link: Bank Of America Just Reacted To McDonald's Sales Decline

He continued, “And with over 120 items on the menu, I defy you to go through the drive-thru and even attempt to read the menu. So, the first priority which they are beginning to address – I don’t think aggressively enough – is to reduce menu complexity.

“I think we need to go back first. The problems did not start in the last two years. For example, the menu complexity, those seeds were planted under Skinner’s term as CEO. In fact, I think most of the seeds of destruction happened under Jim Skinner and were covered up by the positive momentum created by his predecessors Jim Cantalupo and Charlie Bell.”

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Posted In: CNBCRestaurantsMediaGeneralCharlie BellChick-fil-ACNBCDon ThompsonJim CantalupoJim SkinnerLarry Light
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