Not so fast at McD's

Home of Quarter Pounder tries more ambience at its Calif. restaurants


SANTA ANA, Calif. -- The remodeled Newport Beach, Calif., eatery boasts sleek, leather-padded booths, crown molding, sapphire-blue pendant light fixtures and a plasma TV broadcasting cable news.

Just another fancy fix-up at a coastal Orange County sit-down restaurant?

Not quite. Try, the McDonald's of the future.

The empire that pioneered speedy takeout is slowing things down by creating a nicer ambience for diners to relax in while eating a Big Mac.

By year-end, 2,500 restaurants worldwide will be remodeled as part of a three-year project dubbed "Forever Young."

"We're trying to bring back customers that grew up and left us 10 years ago," said Dana Crandall, operations director at nine Orange County McDonald's restaurants.

The move comes as McDonald's has felt pressure from books and films critical of America's lust for fast food, including the 2004 documentary Super Size Me. The movie chronicled the unhealthful consequences of the filmmaker's monthlong binge on McDonald's-only fare.

The huge chain is also bracing itself for a face-off with an unexpected giant: Starbucks. The Seattle-based cafe chain is rolling out this year breakfast sandwiches at 600 stores in Portland, Ore., San Francisco and Chicago.

At a McDonald's in Santa Ana, the iconic red-tile roof and giant yellow arches have been swapped for a flagstone and burgundy-stucco exterior. Inside, hues of black, maroon and beige accent a dining room featuring two plasma TVs, high-back faux leather "sofas" and bar-style seating outfitted with art-deco fabric.

"I want people to say, `Wow. This is a McDonald's,' " said franchisee Virginia Mangione, who by year's end will have remodeled six of her nine Southern California stores.

Richard Adams, a former McDonald's executive who now acts as a consultant for franchisees, said the latest store changes are geared mainly to compete with fast-casual restaurants such as Panera Bread.

These eateries, which offer quick meals in a more sophisticated sit-down setting, have been stealing market share, especially among young adults and families, said Adams of Franchise Equity Group in San Diego.

Bob Sandelman, a fast-food-industry consultant, said the makeovers could be risky, citing Jack in the Box's failed casual chain JBX Grill. The San Diego company scrapped the fancier format last year.

"McDonald's has to be careful that they don't go so far that they lose their identity," said Sandelman, chief executive at Sandelman & Associates in San Clemente.

But diners at McDonald's appear to be responding.

Since it announced plans three years ago to slow store growth in favor of revamping existing locations, the chain has posted 36 consecutive months of positive same-store sales, according to its latest regulatory filings.

Mangione said one of her remodeled stores has had a 50-percent increase in dinnertime sales, despite a reduction in the dining area from 5,000 to 3,100 square feet.

Like other remodeled restaurants, the restrooms feature costly touches such as Corian countertops and floor-length doors on the stalls. And in the restaurant, the floor plan is split into two distinct zones - one for kids, one for adults.

For young adults, bar-style stools and high-back booth seating is available near a TV broadcasting CNN. On the other side of the dining room, families with children can watch the Disney channel at larger tables that can be pushed together.

Still, Adams, the McDonald's consultant, said many franchisees are questioning whether the interior facelifts are worth the cost, which range from $65,000 to $1.5 million. The average McDonald's unit, he said, makes 65 percent of its revenue from drive-through sales. And, most of those customers are looking for one thing: a fast burger.

Adams said the average store sells roughly 50 salads a day, compared with 200 Big Macs.

Polishing off a Quarter Pounder and fries at the Bristol Street McDonald's, Don Wahnschaffe, 60, said the decor changes aren't influencing where he eats. "It's still just the Golden Arches," Wahnschaffe said. "I stopped in because I was hungry and I wanted something quick and didn't have time for In-N-Out."

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