Will McDonald's hip, new move attract Millennials?
The world's largest hamburger chain will relocate its headquarters to the old home of 'The Oprah Winfrey Show.' Will the move be enough to boost sales?
Chicago, look for the Golden Arches.
McDonald's will relocate its headquarters from the suburb of Oak Brook, Ill., to downtown Chicago by 2018, after it signed a lease for the former studio of "The Oprah Winfrey Show," the world's largest hamburger chain announced Monday.
The move to the up-and-coming neighborhood is an effort by McDonald's, who has seen its sales (and fries) go cold, according to The Washington Post, to attract Millennials as customers and as employees.
"We are a brand on the move in more ways than one," Steve Easterbrook, McDonald's president and chief executive, said in a statement Monday. "Moving our headquarters to Chicago is another significant step in our journey to build a better McDonald's. This world-class environment will continue to drive business momentum by getting us even closer to customers, encouraging innovation and ensuring great talent is excited about where they work."
As McDonald's has attempted to redefine itself by becoming appetizing to Millennials, Mr. Easterbrook's statement indicates the fast-food chain believes it must hire young, innovative employees to do just that. And that Millennial workforce wants to live in a city.
"The move will bring McDonald's corporate employees, which currently number about 2,000, from the sleepy suburban village to the hustle and bustle of a burgeoning city neighborhood that is home to some of Chicago's most popular restaurants, like Girl and the Goat and Au Cheval," writes The Chicago Tribune.
Google owner Alphabet Inc., has already moved to the neighborhood, while Hyatt is scheduled to move next year, according to the Tribune.
Other corporations, including Kraft Heinz and General Electric, have announced moves from suburbs to cities.
"Millennials like having the world at their fingertips," according to 2014 report by the Nielsen Company. "A majority are opting to live in urban areas over the suburbs or rural communities."
Sixty-two percent indicate they prefer to live in mixed-use communities found in urban centers, where they can be close to shops, restaurants, and offices, according to the report.
McDonald's relocation of its headquarters coincides with its plans to restructure its global empire to turn around sales. Its net income has been on a downward trajectory. Part of the plan is organizational, according to The Washington Post. Another part is keeping up with Americans' new eating habits, writes The Post.
There has been an "exodus" toward restaurants where Americans believe the food is fresher, such as Chipotle Mexican Grill and Panera Bread. McDonald's, with its salads and wraps, has failed to keep up.
"In general, Millennials say they care deeply about where their food comes from and how it is produced," as The Christian Science Monitor's Cristina Maza reported in May 2015. "They are more likely to seek out locally grown produce, environmentally sustainable meat, and nutritionally dense superfoods. And given their numbers, corporations are starting to pay attention."
This report contains material from the Associated Press.