Betting McDonald’s Brand is Recession-Proof despite The Wall Street Journal.

On Thursday, McDonald’s got zinged by Julie Jargon writing in The Wall Street Journal. While admitting that “The recession helped McDonald’s Corp. more than other restaurant chains as consumers traded down to fast food,” the reporter also noted:

Lately, though, the company's same-store sales growth has begun to slow, leading some to wonder whether investment opportunity is shifting to the casual-dining sector…. If US unemployment continues to rise – as it did last month, to 9.8% – it could hamper any broader industry recovery and hurt McDonald’s results in the US, where the company gets most of its profit.

Now I have to say, first, that Jargon’s report is much more balanced than the excerpt implies. But second, the article knocks the company in front of a particular group of McDonald’s stakeholders that may have little interest in the brand but lots in the share price. Jargon raises a question where none really has existed.

I am not a shareholder. I’m not following the charts and the graphs. But I do think that the McDonald’s brand is extraordinarily strong. Unlike the US manufacturers of cars, consumers still love this brand and keep buying its products: It is America.

With McDonald’s, I believe that unique personality that no competitor can claim is the reputation of America’s Restaurant. How do we capitalize on that reputation? By relating McDonald’s to our lifestyle – our own human experience.

Jack Smith, who would retire as Group President and Deputy Chief Creative Officer of Leo Burnett, McDonald’s long-time ad agency, said those words in April, 1986, to the company’s franchisees. He said in the same speech:

Reputation advertising is the kind that works very hard on the…long-term sales and top of mind. You (McDonald’s) are America’s Restaurant and nobody’s going to take that away from you.

Over this past quarter-century or so, McDonald’s has, like the rest of us, suffered many slings and arrows, although I can’t recall personally suing the company for clumsily spilling apparently hot coffee over myself. It’s been criticized repeatedly for being too large. Too unresponsive. Too exploitive (of beef, grass lands, workers, plastics, paper products) and too liberal and too conservative. It has been accused, all by itself, of causing Americans to be fat.

Through all this, McDonald’s has hardly ever lost sight of the fact that it is, de facto, America’s Restaurant. That’s how the company behaves. That’s how the company responds to economic crises. That’s how its corporate behavior appears in radio and TV commercials, billboard, print ads, websites, promotions – well, you name it.

Leo Burnett’s Smith spoke 23 years ago about TV commercials that now appear to be old-fashioned. Yet McDonald’s keeps to the same vivid brand theme. And if it’s the World’s Restaurant now, instead of just America’s, I’m lovin’ it. It’s a fine long-term brand ROI.

Thanks to Rob Schoenbeck for the timely sharing of Jack Smith’s 1986 speech.

Ripped Off

Last week, Hannah Wood wrote about Bucksstar for Mirror.co.uk; in just days, the story has gone from blogland to National Public Radio:

China has confirmed itself as the “king of counterfeiters” with the building of a new shopping centre dedicated to fake brands. Some of the brand impostors at the mall in Nanjing, east of Shanghai, include a McDonalds look-a-like burger bar called McDnoald’s, a Starbucks-style coffee shop called Bucksstar Coffee, and a wannabe Pizza Hut called Pizza Huh. City bosses are under pressure to ban the soon-to-be opened mall after pictures of the fake stores were leaked, causing uproar amongst angry consumers who feared they'd be ripped off.

As popular as the story’s been, I haven’t seen anyone comment on the unfortunate first sentence. China doesn’t have to confirm its inability or unwillingness to clamp down on brand counterfeiters. Knocking off national and international brands has been going on for decades in China. Some days, brand thievery seems like the national business model.

It’s not always easy to find photographs: Google “Fake Brands in China” for yourself and you’ll see links…but not so many photographs of offending rip-offs like Mak Dak.

If the Nanjing shopping center is doing this as a parody or homage, then the owners will be paying royalties to Starbucks, Pizza Hut and McDonald’s for the privilege.

Don’t hold your breath.

BTW, each of the US brand names in this post is protected by one or more trademarks. All rights reserved.