‘Work­ing at Mcdon­ald’s is not a dead-end job. That ir­ri­tates me’

Mcdon­ald’s is a restau­rant re­born, its UK chief ex­ec­u­tive tells Bradley Ger­rard, with a drive to be fresher and faster than ever

The Sunday Telegraph - Money & Business - - Front page - Paul Pom­roy

‘See,” Paul Pom­roy points in an ex­ac­er­bated man­ner, “we do have real ones”. Stand­ing next to a stack of Bri­tish Lion stamped eggs in the kitchen of the re­vamped St Paul’s branch of Mcdon­ald’s, the UK boss is on a mis­sion to dis­pel cul­tur­ally per­va­sive myths about the fast-food gi­ant.

Mcdon­ald’s has de­vel­oped a rep­u­ta­tion for be­ing an im­per­vi­ous and se­cre­tive cor­po­rate ma­chine that hits back hard at de­trac­tors, in­clud­ing through the courts. It’s a long way from the lib­eral Cal­i­for­nia where the Golden Arches be­gan serv­ing burg­ers in 1940.

A pe­riod of dis­con­nec­tion and a bar­rage of com­pe­ti­tion from new brands such as Five Guys and Shake Shack trig­gered 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 vivid blue suit and trendy glasses, Pom­roy looks like a man with a mes­sage that he is de­ter­mined to serve up along with Steve Easter­brook, a fel­low Bri­ton who sits atop the US par­ent.

“We used to spend so much en­ergy moan­ing 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.”

One of these, Pom­roy con­cedes, was the case that be­came known as “Mcli­bel”, where the fast-food chain took mem­bers of Green­peace to court in Lon­don in what re­mains, at 10 years, the coun­try’s long­est run­ning defama­tion case.

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 claims. This new but un­likely era of trans­parency co­in­cides with Mcdon­ald’s re­cent re­cov­ery. Last year, global earn­ings in­creased 10pc to $5.4bn. The UK di­vi­sion has posted 48 straight quar­ters of ris­ing rev­enues and cus­tomers. The chain now con­trols 10pc of the £40bn fast-food mar­ket.

It doesn’t for­mally break out UK earn­ings, but ac­counts at Com­pa­nies House show pre-tax prof­its steadily climb­ing from £39.9m in 2007 to £287m in the decade up to 2016.

Be­yond eggs, the “step-change in the way peo­ple per­ceive us” ex­tends into its menu, jobs and en­vi­ron­men­tal cre­den­tials. Per­haps most press­ing is the so-called “Mcjob”. The chain en­dured its sec­ond em­ployee strike last week, with protests out­side four of its restau­rants.

The com­pany claims just three peo­ple who were sched­uled to work took in­dus­trial ac­tion out of its 120,000-strong work­force and that at­ten­dees in Cam­bridge and Cray­ford, Kent, were pro­test­ers and not em­ploy­ees.

Pom­roy stresses that staff pay rates have been hiked by a quar­ter in the past three years – roughly the pe­riod that he has been in charge.

He says Mcdon­ald’s 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.”

The chain con­tin­ues to of­fer 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 or 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 the flex­i­bil­ity at work so they can look af­ter young fam­ily mem­bers or stu­dents at home.

“We’ve also got peo­ple like a man­ager in Brain­tree whose daughter is a top ice skater and she needs flex­i­bil­ity to take her to com­pe­ti­tions,” he says. “It’s a myth that peo­ple want 30 hours a week – it’s wrong and it does not ex­ist.”

The firm sur­veyed its staff and says 80pc opted to stay on zero-hours con­tracts. This flex­i­bil­ity may ex­plain why the chain has been able to cre­ate 5,000 posts in the past 18 months.

A job at Mcdon­ald’s is still fre­quently de­rided as “flip­ping burg­ers”, Pom­roy bris­tles. “There’s a per­cep­tion it’s a dead end job. 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.”

And Mcdon­ald’s is not about to stop hir­ing now. Pom­roy will shortly be on the hunt for a fur­ther 1,000 man­agers to help it ful­fil the am­bi­tion of open­ing 25-30 mainly “drive-thru” restau­rants a year.

Man­agers are be­com­ing more im­por­tant to the chain as it over­hauls the “eat­ing ex­pe­ri­ence” within its restau­rants. Fran­chisees have splurged £650m on store re­vamps, in­clud­ing self-or­der ma­chines and mod­ernised decor, sub­sti­tut­ing the Ron­ald Mcdon­ald colour scheme of years gone by for a soft wood ef­fect. Ta­ble ser­vice now means cus­tomers no longer even have to go to the counter to or­der. In the St Paul’s restau­rant, 80pc of the cus­tomers now en­ter and or­der on a ma­chine, with many also se­lect­ing ta­ble ser­vice.

The de­ci­sion to in­vest at a time when ri­vals are be­ing forced to launch dra­matic res­cue plans just to stay afloat is no accident. 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 re­ces­sion in the early Nineties 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. Those that did not adapt quickly enough to change fell away. I went through some re­ally tough times mak­ing peo­ple re­dun­dant but if I treated them fairly they gen­er­ally un­der­stood.”

Now Pom­roy is stay­ing true to what

he wit­nessed all those years ago. The lat­est battleground is in the de­liv­ery mar­ket, and Mcdon­ald’s is sac­ri­fic­ing mar­gins to com­pete with its ri­vals in this field.

“We took the bold de­ci­sion not to in­crease our menu prices on de­liv­ery items,” he says proudly.

“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 food fer­ried 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.

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 – he plans to test other ideas in a se­lect num­ber of restau­rants to es­tab­lish whether they work.

One of these plans in­volves splash­ing out on some £10,000 on cof­fee ma­chines.

In the UK, Mcdon­ald’s sells more cof­fee than any­one else, apart from Costa, but it is keen to dis­pel an­other myth: that it doesn’t use fresh beans.

Pom­roy hopes that trained baris­tas pre­par­ing cof­fees in front of the 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. 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 Morgan Spur­lock, the doc­u­men­tary maker, in his 2004 film Su­per Size Me.

But now, Pom­roy says huge ef­forts are put into mak­ing Mcdon­ald’s food the best it can be. He says the chain and its sup­pli­ers – some of whom it has worked with for more than 40 years – meet monthly to try to im­prove the nu­tri­tional value of its out­put.

“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 food tech­nol­ogy has moved on and there is a bet­ter tech­nique of mak­ing them.”

Its burg­ers are 80pc beef and 20pc fat, the lat­ter amount nec­es­sary or “the burg­ers would fall apart”.

Pom­roy has even turned to on­line fo­rum Mum­snet to help de­velop and spread the word about its low-calo­rie op­tions.

Add to that its Rspca-ap­proved pork and the fact that its dis­tri­bu­tion firm, Martin Brower, pow­ers its fleet of trucks en­tirely on biodiesel (40pc of which comes from used Mcdon­ald’s cook­ing oil), 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 judg­ment but what re­ally ir­ri­tates me is mak­ing a judg­ment with­out the facts.

“Some things are not facts and some things are legacy.”

‘You get great long-term ben­e­fits, such as pri­vate health­care, free food and dis­counts on web­sites’

‘It is one of the best first jobs you can get. Half the fran­chisees started in restau­rants’

Paul Pom­roy, Mcdon­ald’s UK chief ex­ec­u­tive, has over­seen a re­vamp of its restau­rants and a switch to self-or­der ma­chines

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