Monday 23 October 2017

Wake up to a career, and good coffee at McDonald's

Named fifth best employer in Ireland for 2012, the multinational fast food chain is investing in its staff in this country via third level qualification opportunities. By John Mulligan

Adrian Crean: 'We haven’t really looked at a saturation point. I think the opportunities will arise in different ways and in different areas.'
Adrian Crean: 'We haven’t really looked at a saturation point. I think the opportunities will arise in different ways and in different areas.'

"THIS was the longest executive search process that's ever been undertaken," jokes Adrian Crean as he sits in one of the trendy training rooms above the McDonald's restaurant on Dublin's O'Connell Street.

He's not wrong, though.

Last October, Crean became the first Irish managing director of the McDonald's chain in Ireland.

That's something, considering the Illinois icon opened its first outlet here, on Dublin's Grafton Street, back in 1977. For many, it was the first tangible taste of Americana. Today, McDonald's has 81 restaurants in Ireland, 12 of which are company-controlled, the rest run by a tight group of 27 franchisees.

"McDonald's has always been good at creating opportunities for really talented people," he says, sipping on one of the chain's own coffees, which he is at pains, more than once, to point out is made from freshly roasted beans and tastes just as good as anything people can get anywhere else.

For Crean, that opportunity was a slow burner and it took 15 years before he was anointed MD. That's not to take anything away from his ability. It's just the way it worked out.

"I'd been pitching myself for a number of years," he laughs. An accountant, he joined the company in 1997 after a six-year stint with what's now PricewaterhouseCoopers and took over the finance role in 2002. "I think it's great that it's an Irish person they've chosen."

But he also takes over at a time when the economic landscape has suffered a seismic shift. As such, it's easy to wonder whether he's been handed somewhat of a poisoned chalice. Or at least, perhaps one with corked wine.

"It's a tougher time economically, but I think that brings opportunity as well. As long as we keep on investing and keep focused on delivering a great customer experience, then that will be the path to success," he says.

It's clear though -- and Crean doesn't dispute it -- that those customers are spending less and the chain's margins come under pressure as it seeks to offer greater value.

In 2010, McDonald's restaurants in Ireland posted sales of €202m, virtually unchanged on 2009. The chain, which employs 4,000 people in Ireland, doesn't actively disclose overall profitability of its outlets here.

But a franchised outlet in Swords, Dublin, made a €265,000 profit in 2010, according to accounts for that business, while another in Longford made a €164,000 after-tax profit that year, for example.

The dozen McDonald's company-owned restaurants, as well as other franchising activities, generated pre-tax profits of €13.9m in 2010, down 6.5pc from the previous year.

"Over the past couple of years we've seen people's average spend reduce," he concedes. "So you have to differentiate yourself. People are more careful about where they go and their expectations when they do go and eat out are higher than they ever were before."

Part of the formula has involved a chain-wide refurbishment programme (the designs originate from a French firm, no less) that's actually been going on for over five years and is likely to be completed by the end of this year. That, as well as new restaurant openings during the same timeframe, has cost about €40m.

Crean -- who says he consumes McDonald's products "anything from a coffee to a Big Mac" about three or four times a week -- also believes that there's still scope for opening four or five restaurants a year here for the foreseeable future. The newest, which will employ between 60 and 70 people and cost €2m, will open this May in Finglas, Dublin.

"In 2010 we didn't open any and in 2011 we opened four," explains Crean. "Part of the reason for that was that developers were tied up in the business planning process with NAMA."

The site in Finglas, for example, is in a building owned by Bovale Developments, the construction company that was established by brothers Michael and Tom Bailey and which was involved in one of the biggest tax settlements ever witnessed in Ireland. Bovale's loans are among those now with NAMA.

Crean says he doesn't see any saturation point for McDonald's in Ireland.

"We haven't really looked at a saturation point. I think the opportunities will arise in different ways and in different areas. There's only one drive-thru restaurant on the whole southside of Dublin (at Nutgrove shopping centre, it was Europe's first)," he says by way of example and hinting at more.

And no prizes for guessing that the growth formula has also included a push to sell more coffee. McDonald's sold about 4.5m cups in Ireland last year -- roughly one for every man, woman and child in the country.

Wraps have also become a big seller, but the Big Mac remains the most popular product with the public.

For the time being at least, future expansion plans will be spearheaded by both the company and existing franchisees. It's four years since McDonald's took on a new franchisee in Ireland and it's not currently looking for more, but gets calls all the time.

"We've got a great group of franchisees in the business and they have demonstrated that they're able to deliver a great customer experience and are willing to invest in their businesses even through tough economic times," he says.

It's no easy ride either. Crean says the expectation at McDonald's is that franchisees are ready to bust a gut to drive their business.

"Our business is always on. Our franchisees always give their best efforts. That means they're there day in, day out. They don't delegate that responsibility to someone else."

And as the economy suffers, Crean says it's been evident that more and more Irish people are now seeking jobs with McDonald's, where for most of the past decade staff largely comprised a melting pot of immigrants from across the globe.

With a €9 an hour starting wage -- slightly above the €8.65 minimum -- the pay isn't the worst, and Crean says that the company has been investing heavily in its staff via third level qualification opportunities and that people can genuinely build a career with it.

Last night, it was named the fifth best employer in Ireland -- up against the likes of Intel and Microsoft.

Indeed, Crean says that while the government has latched onto sexy technology firms and agri-food in its quest to revitalise the economy, there's a danger that the hospitality industry can become an afterthought.

"The tourism and hospitality-related sectors are ones where there is more opportunity. They also tend to be more labour-intensive, so their ability to generate employment quickly and to sustain it is greater than perhaps in other sectors," he insists. "I also think anything the government can do to reduce the cost of doing business is important."

Meanwhile, some challenges are looming on the horizon. Food companies such as McDonald's have long been targeted by nutritionists, but now sugary and calorie-laden foods are in the sights of governments.

Calorie content

Here, there's talk of a "sugar tax", which Crean claims is more of an issue for companies that manufacture soft drinks for instance. But the government also wants food outlets to start displaying calorie contents in a bid to help tackle rising obesity.

Crean says McDonald's has been proactive for years in offering alternatives such as salads, juices and fruits, while detailed calorie information is also available on its website and in restaurants.

He dismisses the notion that customers might be taken aback if they're suddenly presented with calorie information on the store menu. A Chicken Legend, for example, has more calories than a Big Mac, a McChicken more than a cheeseburger or a fillet-o-fish -- not necessarily what consumers might think.

"I'm not sure that they would be surprised. That information is already available. But there are 10,000 outlets in Ireland's food sector and a breadth of menus. If you want to choose lower calorie options, they are there."

Downstairs, customers are still piling through the door on a weekday afternoon. It's hard to imagine most of them will give a hoot about calories for the half hour or so they're there. In the land of the golden arches, Big Macs still rule.

Indo Business

Also in Business