Bringing the Sizzle Back to McDonald’s

Don Thompson is the star of the show. At McDonald’s annual Managers Peak Experience in Las Vegas–a conference for company management–attendees line up to shake his hand, take a picture with him, or just shoot the breeze as he walks through the event’s massive expo hall. The affable yet focused executive is an attraction in his own right, unable to make it through the crowd to peruse the countless _supplier displays. Among those in the queue to press the flesh is Tilmon F. Brown, CEO of New Horizons Baking Co. (No. 73 on the be industrial/service 100 list with $56.2 million in sales). Brown, who supplies buns to some 1,300 McDonald’s restaurants, is all smiles. Business is good, he says, and he offers words of greetings and continued success to Thompson.

As president of McDonald’s USA, the largest division of the mammoth restaurant chain, Thompson is responsible for ensuring the financial success of McDonald’s 13,700 locations in the _United States. And judging by his reception, he’s good at it. Some 24 hours earlier, the 44-year-old executive gave a rousing speech to the 16,000 attendees in which he discussed the state of the business, the company’s future growth plans, and the importance of each conference attendee, calling them ambassadors of the brand. Describing the mood as festive would be an understatement. Pyrotechnic displays shot flames dramatically into the air while musical performances entertained the crowd, many of whom were on their feet dancing and slamming noisemakers together. “The place was rocking,” recalls the Chicago native with a smile. “The noise level, the energy, the cheering, you would have thought you were in the middle of some major conference.”

Business is good at the Oak Brook, Illinois-based chain. _Second quarter revenues for McDonald’s jumped 12% to more than $6 billion, and sales at restaurants open for more than a year increased 7.4%. While the company recently reported a second quarter net loss of $711.7 million, or 60 cents a share, that was primarily the result of an expected $1.6 billion charge on the sale of restaurants in Latin America. Thompson’s contributions to the company’s top line are apparent. Total U.S. _revenues for 2006 reached $7.464 billion, compared with $6.995 billion in 2005 and $6.525 billion in 2004–solid growth. Same-store sales for U.S. locations weren’t too shabby either, increasing 5.2%, 4.4%, and 9.6%, respectively, during that period.

Much of that growth was the result of initiatives derived from Thompson’s leadership: a more appealing breakfast menu, _specialty coffees, and healthier menu options such as the Asian Salad and Snack Wrap. It wasn’t always so cheerful within the golden arches. In the 1990s, the company’s growth slowed as America became more health conscious and most of McDonald’s high-calorie menu offerings fell out of favor. By the turn of this century, profits had eroded dramatically, _culminating in _January 2003 with the company’s first quarterly loss since going public in 1965. A turnaround plan was _needed–and Thompson stepped in. As regional vice president of the chain’s San Diego region,