On Friday, McDonald's, purveyor of the Big Mac and other fast foods, announced it will phase out use of Heinz ketchup. That is less of a blow to Heinz than you would imagine at first blush, since McDonald's uses Heinz ketchup only in Minneapolis, Pittsburgh and some overseas markets. The two companies will work for a gradual transition so as not to disrupt their businesses, and to allow McDonald's to switch to other ketchup suppliers.
The move came about after Bernardo Hees, a former CEO of Burger King, a competitor to McDonald's, assumed leadership of Heinz when Warren Buffet's investment company and 3G Capital bought the ketchup maker. Heinz also produces baked beans and vinegar. Hees rejuvenated Burger King, making it a stronger rival of McDonald's in the worldwide fast food market.
Earlier in the week, on Monday, the US fast-food giant McDonald's announced that quarterly profits rose 3.7%, but the company presented a cautious outlook on the rest of 2013.
McDonald's chief executive Don Thompson is reported as saying, "the informal eating-out market remains challenging and economic uncertainty is pressuring consumer spending."
The company reports "relatively flat" global comparable store sales for July, and flat operating income in the US.
In Europe, McDonald's comparable sales were down 0.1%, but operating income was up 5%.
In the Asia/Pacific, Middle East and Africa region, comparable store sales fell 0.3%, while operating income declined 1%.
"We have succeeded in a variety of operating and economic environments," Thompson said.
"I am confident that our System, global infrastructure and the unique and evolving McDonald's brand experience will enable us to deliver sustained profitable growth for the long-term."
However, as reported in the Wall Street Journal recently, a Goldman Sachs analyst says a survey of 2,000 consumers shows McDonald’s appears to be losing customers. The analyst is reported to have said the company has not had strong innovation for the past few years, and that it is the restaurant consumers are least likely to recommend to their friends/family.