Tarnished Arches

Its bottom line may be as healthy as ever, but McDonald's image has been battered by those who blame the company for the country's obesity problem

June 14, 2006|By DAN THANH DANG | DAN THANH DANG,SUN REPORTER

For a limited time only, indeed: The days of finding Disney movie collectibles in McDonald's Happy Meals are coming to an end this summer, a corporate parting of ways that some see as yet another blow to the Golden Arches' once rock-solid foundation.

The end of the cross-promotional collaboration between the nation's largest fast-food chain and the House the Mouse Built was a mutual decision, according to officials from both companies, but it comes at a time when fast-food companies are under fire in lawsuits, documentaries and books that claim they contribute to the nation's obesity epidemic, especially among children.

"I think McDonald's is in trouble," says Robert Frankel, a brand expert based in Los Angeles. "Even if they win the lawsuits, books and movies like Chew on This, Super Size Me and Fast Food Nation don't show a lot of the joys of eating there. They've taken major blows. McDonald's loses in the public arena."

And yet, the American public is notorious for contradictory behavior. Even as the McDonald's image is taking its hits, the company's bottom line is better than ever.

Last month, the Illinois-based restaurant giant posted 37 months of sales growth at stores open at least a year - a jump fueled by the popularity of dollar-menu items such as double cheeseburgers and fried chicken sandwiches rather than the healthier salads and fruit that McDonald's began offering in the wake of criticism about unhealthy fare.

Officials say revenue has jumped 33 percent in four years. And McDonald's stock price has tripled since trading in the low teens just a few years ago.

McDonald's said promotional deals with other companies will replace the Disney collaboration after the end of the film company's final two tie-ins - featuring characters from Cars this month and the Pirates of the Caribbean sequel next month.

"Our 10-year partnership with Disney simply ran its course," says Walt Riker, a McDonald's spokesman. "We're going to continue to talk to Disney and DreamWorks. There could be future collaboration on Disney toys. ... We don't hear from mothers who say, `Take away the toys.' Toys are part of the family experience at McDonald's."

Pop into a local McDonald's, and it's easy to see why. On a recent afternoon, the PlayPlace at the restaurant in Ellicott City's Long Gate Shopping Center is packed with smiling parents and boisterous children. The counter clerks are swamped with long lines and lunch orders. Almost every table brims with cheeseburgers, chicken McNuggets and french fries.

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But it's that kind of high-fat fare that has drawn criticism in recent years. Filmmaker Morgan Spurlock showed America the harmful effects of eating McDonald's food every day for a month in his 2004 movie Super Size Me. A movie adaptation of Eric Schlosser's book, Fast Food Nation, will be released in theaters this fall, and a version of the book for younger readers, called Chew on This, hit stores last month.

"Their corporate financials may look good right now, but the public stuff is really going to hurt," Frankel says. "In the public consciousness right now, there's as much a direct link between cigarettes and cancer as there is between obesity and fast food. It isn't all McDonald's fault, of course, but people are going to go after them."

The size and scope of the McDonald's empire has always made it an easy target over the years. Who doesn't remember the hot-coffee lawsuit in 1992? Or the woman who sued in 2000 because she claimed an overly hot pickle fell out of her hamburger, inflicting a burn on her chin and mental suffering?

But lately, the slaps are coming from more notable critics and reaching a wider audience. After the dings from Schlosser and Spurlock, childhood-obesity experts are pointing fingers at food companies such as Coca-Cola Co., Kraft Foods Inc. and McDonald's, saying they market unhealthy foods to kids.

More lawsuits

Last month, lawsuits filed against McDonald's claimed that the fast-food giant misled the public by saying its french fries contained no wheat or gluten products. More obesity lawsuits are expected, experts say.

"I do think that McDonald's is increasingly becoming radioactive," says Gary Ruskin, executive director of Commercial Alert, an Oregon-based nonprofit critical of commercialism in schools and other public areas. Ruskin's group is an advocate of prohibiting the marketing and sale of junk food in schools.

"It's a sign of things to come," Ruskin says. "Across the country, we're seeing quite a strong movement to get junk-food marketers out of school. Across the world, we're seeing greater alarm at marketing junk food to children. In the climate today, would McDonald's be able to cut a deal with Teletubbies as they did years ago? I think not. Sesame Street had a deal with McDonald's years ago, too. That kind of thing would be a much more difficult partnership now."

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