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McDonald's UK CEO on how the chain is embracing the 21st century: 'We made some mistakes taking on battles we shouldn’t have'

“See,” Paul Pomroy points in an exacerbated manner, “we do have real eggs”.
Standing next to a stack of British Lion stamped eggs in the revamped St Paul’s restaurant’s kitchen, the boss of McDonald’s UK is on a mission to dispel culturally pervasive myths about the fast-food giant.
The Golden Arches traces its roots back to liberal California where it began serving burgers in 1940 but more recently it has developed a reputation for being an impervious and secretive corporate giant which hits back at detractors hard, including through the courts.
This, alongside competition from new brands such as Five Guys and Shake Shack, led to the company posting one of the worst years in its history in 2014 when annual net income dropped 15pc to $4.7bn (?3.5bn) after serving a million fewer customers globally. 
Crisply dressed in a power blue suit and trendy glasses, Pomroy looks like a man with a message that he and fellow Brit Steve Easterbrook, who sits atop the US group, are determined to serve up.
“We used to spend so much energy moaning in head office about people not understanding us and we hunkered down, taking shots without explaining what we did,” recalls Pomroy who first joined the company in 1996.
“We did not allow people in as we were nervous to open up and concerned about how people would tell the story. We had some fairly tough stories and we made some mistakes taking on battles we shouldn’t have.”
McDonald's Big Mac
One of these, Pomroy concedes, was the case dubbed McLibel, where the fast food chain took members of London Greenpeace to court in what remains the country’s longest running libel wrangle at 10 years.
Even though the ruling in 1997 went in its favour because only parts of the activist group’s leaflets were true, it lost in the court of public opinion.
“What we have now is an ongoing desire to open up and explain who we are and what the brand stands for,” Pomroy adds.
This seems to be working with global earnings at McDonald’s up 10pc to $5.4bn in 2017 and the UK division posting 48 straight quarters of rising revenues and customers, giving it a 10pc share of the ?40bn UK informal eating out market. The company doesn't formally break out UK earnings, but accounts on Companies House for McDonald's Restaurants Limited show pre-tax profits steadily rising over the past decade from ?39.9m in 2007 to ?287m in 2016, the latest figures available.
Beyond eggs, this “step-change in the way people perceive us” extends into its full menu, its jobs and its environmental credentials.
McDonald's UK CEO on how the chain is embracing the 21st century: 'We made some mistakes taking on battles we shouldn’t have'

Protesters outside a McDonald's store in Manchester protesting over pay

Credit:
PA
Perhaps most pressing is the so-called ‘McJob’. The chain endured its second ever strike this week with protests outside four of its restaurants.
It claims just three people who were scheduled to work took industrial action out of its 120,000-strong workforce and that attendees at Cambridge and Crayford, in south-east London, were protesters and not employees officially striking.
Pomroy stresses pay rates for its workers have been hiked by a quarter in the past three years - a period of time nearly as long as his tenure in charge.
He says his company was paying above the minimum wage when the new, higher national living wage for those aged 25 and up was introduced.
“We took that as an opportunity to review our strategy,” he says.
“Every time the national living wage goes up we apply that to the minimum wage earners. It went up 7pc last year, which was 40p and so we added 40p to the minimum wage earners.”
McDonald's stores
The chain continues to offer its staff zero-hours contracts but again, Pomroy insists this is not forced on anyone and staff can be, and are, on fixed-hours contracts.
“The contracts that get talked about [in the press] we don’t recognise,” he says. “We never leave our crew waiting for hours and never cut hours at the last minute. 
“The contracts are not exclusive and you get great long-term benefits after two years, such as private healthcare, a free food allowance and discounts on websites.”
He cites their usage as simply reflective of the way many people want to work, including grandparents who want flexible working to look after young family members or students.
“We’ve also got people like a manageress in Braintree whose daughter is a top 10 ice skater and she needs flexibility to take her to competitions,” he states.
“It’s a myth people want 30 hours a week - it’s wrong and it does not exist.”
The firm surveyed its staff and says it found 80pc opted to stay on zero-hours contracts. Perhaps this flexibility is why the chain has been able to create 5,000 new jobs in the past 18 months in spite of many still deriding it simply as ‘burger flipping’.
“There’s a perception it’s a dead end job,” Pomroy gristles. “I won’t swear, but that really irritates me.”
“It is one of the best first jobs you can get. Half the franchisees started in restaurants and a third of the executive team did too.”
McDonald's UK CEO on how the chain is embracing the 21st century: 'We made some mistakes taking on battles we shouldn’t have'

McDonald's UK boss Paul Pomroy

Credit:
Geoff Pugh
And it isn’t about to stop hiring now. Pomroy will shortly be on the hunt for a further 1,000 managers to help it fulfill its ambition of opening 25-30 mainly drive-thru restaurants a year.
Managers are becoming more important to the chain as it overhauls the experience of eating in one of its restaurants.
Its franchisees have splurged a massive ?650m on revamping stores to include self-ordering machines and upgraded decor with a soft wood effect, substituting the Ronald McDonald colour scheme of years gone by.
Table service now means customers no longer even have to go to the counter. In the St Paul’s restaurant, a remarkable 80pc of customers now enter and order on a machine, with many of these also selecting table service.
The decision to invest at a time when many casual dining rivals are being forced to launch dramatic rescue plans just to stay afloat is no accident.
McDonald's group sales and profits
Before joining McDonald’s, Pomroy spent four years as an accountant within Smith & Williamson’s insolvency team. This experience, and his training prior to it, took place during the severe recession in the early 1990s when consumers, much like now, were feeling the pinch.
“I saw how important it was to make sure cash was flowing through a business to the supply chain and to the grassroots,” he recalls.
“Also, the businesses that survived the recession were the ones that invested and those that did not adapt quickly enough to change also fell away.
“I went through some really tough times making people redundant but if I treated them fairly they generally understood.”
And Pomroy is staying true to what he witnessed all those years ago.
The latest battle ground in casual dining is delivery and McDonald’s is sacrificing some of its margin to compete with rivals.
“We took the bold decision not to increase our menu prices on delivery items,” he boasts. “If you look at other brands, they say there is a delivery charge but the menu prices are higher [than inside the restaurant] too.”
It began a delivery service via Uber Eats in June and now offers ferried food from 275 stores.
“We’ve just broken through ?50m of sales on delivery since we started and it is already 10pc of restaurant volume,” he says.
McDonald's UK sales
In the coming weeks, a total of 440 restaurants will offer delivery with plans to hike this to 800 “as quickly as we can”.
Pomroy describes himself as impatient and so plans to test more concepts in a select number of sites to establish whether they work.
One of these plans has involved splashing out on some ?10,000-a-piece barista coffee machines.
McDonald’s is already number two in UK coffee sales behind Costa Coffee but another myth it is battling is the one that it doesn’t use fresh beans.
Pomroy hopes trained baristas visibly making coffees in front of its customers will grind this perception away.
The married father of two sons grew up in Bromley, the town where he did his restaurant training when he first joined McDonald’s in 1996.
Back then, the chain was a lightning rod for criticism about its contribution to the western world’s increasingly poor diet, brought all too visually to life by documentary maker Morgan Spurlock in his 2004 film Super Size Me.
But now, Pomroy says huge efforts are put into making its food the best it can be. He says the chain and its suppliers - some of whom it has worked for roughly 40 years - meet monthly to try and improve the nutritional value of its food.
“We’ve reduced as much sugar from our buns as we can,” he claims. “If we took any more out it would just be an anaemic bit of toast. We can’t take any more out until there is a better technique of making them and food technology has moved on.”
Its burgers, too, are 80pc beef and 20pc fat, the latter amount necessary or “the burgers would fall apart”.
Pomroy has also harnessed the power of online forum Mumsnet to help develop and spread the word about its low-calorie options.
Add to that its RSPCA-approved pork and a food distribution fleet of trucks powered entirely by used cooking oil from its restaurants, Pomroy is full of reasons why McDonald’s is a new beast now.
“The one thing I’m proud of is that we’re not embarrassed about anything we do,” he proclaims.
“We want people to understand the facts first. You can still make a judgement but what really irritates me is making a judgement without the facts.
“Some things are not facts and some things are legacy.”
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