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McDonald's future isn't about America anymore
(McDonald's Australia)
For the first time in more than 40 years, the number of McDonald's restaurants in America is shrinking.
Executives told the Associated Press that closures are outpacing new fast-food restaurants in America. US sales have been on the decline for the past five years.
The company will close 700 underperforming restaurants this year, many in the US. It has more than 36,000 total locations.
The changing attitude of US consumers is one of the greatest challenges for McDonald's, former CEO Don Thompson said in a call with investors last year.
"Customers want to personalize their meals with locally relevant ingredients. They also want to enjoy eating in a contemporary inviting atmosphere. And they want choices: choices in how they order, choices in what they order, and how they’re served," Thompson said.
Thompson has since been replaced by Steve Easterbrook.
As McDonald's loses market share in the US, it's increasingly looking like its future is overseas.
The company is opening hundreds of restaurants in Europe and Asia.
One of McDonald's most successful current markets is in France. The company has 1,200 locations there and is investing 200 million euros to expand more.
(Business Insider, data via Bloomberg)
Business Insider's Pamela Engel notes that McDonald's franchises in France are far superior to the ones in America.
Customers place orders on touch screens that feature different languages. The restaurants also have high-end offerings like an elevated McCafe and a blue-cheese burger.
At McDonald's in Australia, workers prepare fresh food orders in front of customers. Items feature fresh ingredients like pineapple and guacamole.
(Business Insider / Pamela Engel) The McCafe case in France.
While McDonald's has tried some of these innovations in America, its store fleet is so big that the company can't scale new ideas as easily.
For instance, when McDonald's tried to launch a customizable-burger program, it was plagued by operational challenges like high cost to franchisees and long wait times for customers.
McDonald's also has more competition in the US than it does overseas, where chains like Panera Bread and Chipotle aren't prevalent.
McDonald's might have trouble innovating in the US.
But it can still dominate overseas.
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