McDonald's Europe in Presidential Upheaval

08 June 2005

Exit Russ Smyth (48), president of European operations at McDonald's Restaurants. Enter Denis Hennequin (46), the former chief of the burger behemoth's French unit. Both events happened simultaneously Monday and insiders hint there was blood on the carpet.

According to a McDonald's spokesman, Smyth quit for 'personal reasons'. He did so against a background of disappointing sales across the region - in stark contrast to the US parent's recovery stateside.

Hennequin assumes presidential responsibility for 6,000 restaurants in 51 European nations - and he has a fight on his hands. So far as McDonald's new 'healthy' image is concerned, Europeans are 'Lovin' It' significantly less than their US counterparts.

Among European outlets trading for at least thirteen months, sales were down in two of the year's first three months. In the US, however, such eateries posted a 4.7% sales gain in April; in Europe sales fell by 0.7 per cent.

Prior to his departure, Smyth told McDonald's annual meeting that the firm was "gaining momentum" in Europe, although he admitted there was "a lot of economic wind in our faces".

"Until we see US-like results," he told investors, the company would not be satisfied. They didn't. And it wasn't.

McDonald's chief operating officer Mike Roberts read the ritual eulogy for the departed: "I regret that he's moving on, but I know what he is doing what's right for him, his family and the direction he wants to take his career."

Roberts then rallied the troops, saluting the incoming Hennequin for his contribution to European "sales traction". He continued: "We remain extremely confident in our people and in the strategies in place in Europe."

Europe and the US each generate around 35% of Big Mac's worldwide revenues.

Data sourced from Financial Times Online; additional content by WARC staff