‘McDonald's? Meh': how the fast food giant lost its grip on Britain
When McDonald's opened its first UK restaurant in Woolwich, south-east London, in 1974, thousands queued to get a taste of its legendary burgers and fries.
Their enthusiasm was a sign of things to come: in the decades since, McDonald's has grown to become Britain's biggest restaurant chain. Today it has almost 1,500 sites across the country and almost £2bn in annual revenues.
Yet Britain's enduring love affair with the once-glamorous 'golden arches' is on the rocks. Sales have fallen amid a backlash over price increases, while both cheaper rivals such as Greggs and more upmarket fast food offerings such as Wingstop are luring away customers.
With its ubiquitous presence on Britain's high streets and comparative lack of glamour, McDonald's has been caught in a pincer movement between cheaper rivals and upmarket chains – leaving it adrift in the viciously competitive dining market.
'It is faced with customers trading down into cheaper alternatives and independent fast food and then you've got people trading out, going up into the cool, trendy brands,' says Simon Stenning, the director of Future Foodservice, a consultancy.
McDonald's leadership team in America has repeatedly singled out the UK as one of its most difficult markets, warning that negative comparable sales in Britain are dragging on international performance.
Speaking to investors last month, Chris Kempczinski, its chief executive, said: 'The UK is not yet gaining share. There's still work for us to do in the UK. The share losses are to the people that we should be beating.'
McDonald's has been hit by sharp increases in the cost of ingredients and staff in recent years, forcing the chain to raise prices, angering customers in the process.
The price of a Big Mac has risen to around £4.89 from £2.99 in 2020, while a Double Cheeseburger has risen from £1.49 to £2.29 over the same period. A large Big Mac meal costs about £7.59.
Though it is still one of the cheaper meals on the high street, experts say the inflation has particularly hurt McDonald's because it has more customers on lower incomes than other chains.
'McDonald's is a bit like JD Wetherspoon: all human life is there,' says Peter Martin, the founder of hospitality consultancy Peach 20/20. 'You've got a big chunk of that who are much more price-sensitive.'
'A lot of its customer base is struggling financially at the moment or are worried about outlook for finances and therefore being a bit more careful with their spending,' adds Eleanor Scott, a travel and leisure specialist at PwC.
'A Big Mac is a 'known value' item. People know how much it costs, and if that changes, they notice,' she says. 'For a lot of other operators, that just isn't the case.'
She adds: 'If you put 40p on a £2 product, it's a lot more noticeable as a percentage than putting 40p on a £5 product. Their price point makes that a lot more visible.'
Last year, Greggs overtook McDonald's to become the UK's most popular breakfast location as shoppers sought out even cheaper meals. Greggs sells a breakfast roll with a cold drink for £2.95, while a savoury bake and a hot drink cost £3.55.
In a financial update in February, Kempczinski alluded to the threat posed by Greggs, saying: 'You have a very strong local competitor [in the UK] who's been very aggressive from a value standpoint, particularly on breakfast.'
But it goes beyond Greggs. Stenning says there is 'an awful lot of cheaper independent fast food' challenging McDonald's on price at the lower end too.
McDonald's has introduced a £5 meal deal in a bid to restore its reputation for cheap prices. But it faces a battle on another front. Newer, more premium brands such as Wingstop and Popeyes are drawing attention away.
'If you're young and in the right demographic, Wingstop or Dave's Hot Chicken is absolutely the place to be, to be seen, to take all your photos and all that malarkey,' says Stenning. 'McDonald's? Meh.'
'There's so many brands coming in. There's so much choice,' adds Martin. 'I don't think McDonald's are going to go away, just like Burger King's not going to go away, or KFC – but they're going to have to react.'
Walk into any McDonald's today and the scene is very different from the hustle and bustle that greeted diners in Woolwich 50 years ago.
McDonald's restaurants have been criticised for becoming less welcoming in recent years after the business ramped up its use of self-checkout kiosks. Instead of walking up to the till and speaking to a member of staff, customers are faced with impersonal screens to key in their orders.
'I don't think the screens help, because that means a whole bunch of people are standing around the tills and queues are stretched throughout the store,' Amir Mousavi, the founder of The Good Food Studio, a restaurant consultancy.
The masses of delivery riders that wait outside its stores to pick up orders have proved divisive in some parts of the country too. Last month, a group of Fulham residents launched a campaign to block plans for 24-hour trading at a local McDonald's.
They argued the site had become a hotbed of crime and that groups of delivery riders crowding the site were blocking access to their homes.
'People are really p----d off with delivery drivers,' says Martin. 'That is a real issue.'
Many of McDonald's newer sites are now designed with riders in mind – some even have their own dedicated waiting rooms. The business has even opened sites that cater solely to delivery orders. But this is a much trickier feat to pull off on busy high streets.
'The more out-of-town sites are being designed with that in mind, but legacy sites haven't,' Martin says. 'If you're building from scratch, it's easier to segregate.'
McDonald's woes in the UK have also been compounded by the impact of a sexual harassment scandal at the chain in recent years. Alistair Macrow, its UK chief executive, was hauled before the business and trade select committee for a second time this year after the BBC unearthed more than 100 complaints.
The company has launched a clampdown on sexual harassment in its stores, telling the BBC in March it had implemented 'everything from enhanced training programmes and onboarding practices, through to the launch of a new digital speak-up channel designed with our franchisees' restaurant crew in mind'.
At the same time, it faced boycotts from pro-Palestinian customers after its former Israeli franchisee gave free meals to Israeli soldiers. McDonald's bought back the Israeli business in 2024 after calls for boycotts caused a slump in global sales. Kempczinski called the boycotts 'disheartening and ill-founded', blaming them on 'misinformation'.
Whether these last two issues will tangibly hurt the British business is debatable. 'I don't think for ordinary people it makes a lot of difference, quite frankly,' says Martin.
Regardless of its challenges, McDonald's has vowed to keep investing in the UK, announcing plans last year to spend £1bn on opening 200 new restaurants, in a move it claims will create over 24,000 new jobs by 2028.
But one thing is certain: it won't be smooth sailing for the fast food giant from here on out.
A McDonald's spokesman said: 'The long-term investment in our menu, our people, our restaurants and our communities has seen our share of the market grow significantly since Covid-19, and in the past five years our growth has been three times that of our nearest competitor.
'There is no escaping the fact that the economic environment remains challenging for consumers – but this makes our role as a reliable, affordable brand that people can trust more important than ever before.'
He added: 'There is a huge amount of opportunity in the UK market, and we are focused on both delivering that growth and delivering for our customers.'
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