McDonald’s (MCD) has been working overtime to win back its customers after it saw sales drop for several financial quarters last year amid higher menu prices.
The fast-food chain recently boosted its spending on advertising and even unveiled a new McValue menu that contains meal deals aimed at attracting frugal customers back into its restaurants.
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The increased effort comes after the fast-food chain’s road to recovery hit a snag in October when several of its restaurants suffered an E.coli outbreak that sickened more than 100 people, hospitalized 34, and killed one person.
Related: McDonald’s hopes to win back customers with a generous offer
In McDonald’s latest earnings report, its U.S. comparable sales increased by a minor 0.3% year-over-year during the third quarter of 2024, while its net income shrunk by 3%.
McDonald’s rethinks its DEI goals
As McDonald’s battles weak sales, it has opted to kick off the new year by scaling back controversial policies that have recently caused other companies to face boycott threats.
In a new memo, McDonald’s revealed that like many other corporations, it has recently reevaluated some of its diversity, equity, and inclusion initiatives.
The company claims that its decision to do so comes after it engaged with its shareholders and assessed the potential legal impact of the U.S. Supreme Court’s decision to end affirmative action in college admissions in June 2023.
A customer views a digital menu at the drive-thru outside a McDonald’s Corp. restaurant in Peru, Illinois, U.S., on Wednesday, March 27, 2019.
“Last year, we completed a comprehensive Civil Rights Audit (CRA) that looked at all aspects of inclusion across our system. We also engaged with shareholders to understand their expectations and assessed the overall landscape of shareholder proposals. Following the Supreme Court ruling in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College, we also assessed the shifting legal landscape to anticipate how this ruling may impact corporations such as McDonald’s. And finally, we benchmarked our approach to other companies who are also re-evaluating their own programs.”
McDonald’s changes to its DEI initiatives include curbing the practice of “setting aspirational representation goals.” The fast-food chain is also “pausing external surveys” and will retire its Supply Chain’s Mutual Commitment to DEI pledge.
McDonald’s started the pledge in 2021, and it involved encouraging its suppliers and partners to adopt annual DEI training for employees, increase the use of diverse suppliers, and track and provide updates on their DEI efforts.
Related: Costco faces boycott threats after defending controversial policy
Going forward, McDonald’s will also now be calling its diversity team the “Global Inclusion Team.”
“This name change is more fitting for McDonald’s in light of our inclusion value and better aligns with this team’s work,” said McDonald’s in the memo.
Despite these changes, McDonald’s states that it will continue to report the company’s demographic information in its annual Purpose & Impact report.
“McDonald’s leaders will continue to be held accountable for fostering an inclusive environment within their teams,” said McDonald’s in the memo.
Consumers are divided over McDonald’s decision
Conservative activist Robby Starbuck, who has successfully pushed many companies such as Walmart, Harley-Davidson, and Tractor Supply to axe their DEI programs last year, took credit for McDonald’s decision to scale back DEI.
He claimed in a post on X that he reached out to McDonald’s senior marketing director on Jan. 3 warning him that he will be doing a story that exposes the fast-food chain’s “woke” policies.
The move from McDonald’s garnered mixed responses from consumers who took to social media platform X to express their opinions on the decision.
What a cowardly move by @McDonalds leadership. They didn’t have the guts to stand up for DEI like @Costco. But they sure as hell don’t mind all of those Black customers walking through the golden arches. https://t.co/fPjDgHj6fH
— rolandsmartin (@rolandsmartin) January 6, 2025
More Food + Dining:
Chipotle faces lawsuit for serving ‘inconsistent’ portion sizesMcDonald’s menu change sparks sharp criticism from customersPizza Hut hopes a major store change will win back customers
So.@McDonalds has axed the DEI stuff.
Good news
— M K (@Modster99) January 7, 2025
McDonald’s decision to scale back DEI comes after Costco (COST) defended its DEI policies last week against a group of shareholders who are rallying to have them removed.
“Our efforts at diversity, equity and inclusion remind and reinforce with everyone at our company the importance of creating opportunities for all,” said Costco’s board of directors in a recent notice sent to shareholders. “We believe that these efforts enhance our capacity to attract and retain employees who will help our business succeed.”
Some consumers threatened to boycott Costco over its decision to defend DEI.
As the anti-woke movement continues to grow, many companies now view DEI as a risk. According to an analysis from Bloomberg last year, more than two dozen public companies mentioned DEI as a risk factor in their securities filings.
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