McDonald's CEO Steps Down Amid Declining Sales--2nd Update

By George Stahl 

McDonald's Corp., struggling amid declining sales and menu changes, said Don Thompson will step down as president and chief executive, effective March 1.

The fast-food chain will replace Mr. Thompson with Steve Easterbrook, who was the company's chief brand officer. Mr. Easterbrook also will join the board of directors, replacing Mr. Thompson.

McDonald's is battling economic hurdles, changes in consumer tastes and its own menu missteps, all of which led customer traffic last year to fall 3.6% globally, including a 4.1% drop in the U.S., its most important market. The company last week reported a 21% drop in fourth-quarter earnings.

On McDonald's conference call last week, Mr. Thompson said, "We're changing, and we're doing it aggressively. However, it will take time, especially in our larger markets, for customers to notice the comprehensive changes that are under way."

The restaurant expects January same-store sales to decline.

McDonald's has said its broad, complicated menu slows service, and that it has lost touch with younger consumers, who are trading their Big Macs for seemingly healthier, fresher options like those at Chipotle Mexican Grill Inc. It also is losing customers to more upscale sandwich rivals such as Five Guys Holdings LLC and Chick-fil-A Inc.

This month, McDonald's launched a new marketing campaign in the U.S. with commercials and food packaging designed to refresh its longtime "I'm lovin' it" slogan, under Chief Marketing Officer Deborah Wahl, who joined in March, and McDonald's U.S.A. President Mike Andres, who took over in October.

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