When it comes to selecting a favourite from the McDonald’s menu, Paul Pomroy is a Big Mac kind of guy, though he’s also fond of a side order of chicken nuggets. As a dedicated worker and a married father of two, Paul appreciates quality food, great taste, and a well-earned treat. When it comes to eating out, he also wants to have the option of something new or healthier, and to be able to easily customise his meals based on mood or dietary requirements. Like most parents, he also wants to be able to relax at a restaurant table where food is delivered to him while his children play.
Paul Pomroy, a ‘Big Mac kind of guy’
As CEO of McDonald’s UK, Paul understands his customer, because he is the customer. Further, his sentiments have been echoed by thousands of regular patrons. Not content to rest on the laurels of the long-standing food chain, Paul has set to work to ‘re-image’ the restaurant brand that he has been a part of for twenty years. This includes changes to the physical environment, creating modern customer service and ordering processes, developing new and exciting menu items, and pushing transparency around the McDonald’s UK supply chain so customers know they’re only getting the best produce from local farmers and suppliers.
“One of the biggest opportunities for me as the new CEO was to accelerate our investment. We are nearly halfway through re-imaging all 1,250 restaurants in the region, with plans to keep upgrading the dining experience and deliver what truly matters to our customers,” says Paul. “The biggest transformation is for what we call the ‘experience of the future’, which is where we are transforming the whole look and feel of the restaurant. From the moment you walk in, you will now see a completely new décor scheme, new seating, new shop fronts and food ordering arrangements.”
The biggest transformation is for what we call the ‘experience of the future’, which is where we are transforming the whole look and feel of the restaurant.
Paul began earning his finance and business stripes as an accountant with Smith & Williamson before joining McDonald’s in 1996 as a real estate analyst for the firm’s Corporate Finance department. He went on to become regional financial controller for London and the South East, then head of business strategy working alongside Food and Marketing, followed by a stint as head of commercial finance. Before being appointed CEO, Paul managed most levels of corporate finance, tax, pricing, and financial projections for four years, while also being introduced to the company’s development and supply chain functions.
Engaging 3.7 million customers and 110,000 employees each day
After twenty years of climbing the ‘McLadder’, Paul is now tasked with engaging the company’s 3.7 million daily customers, and its 110,000 employees UK-wide. Since taking over the CEO role in February last year, Paul has led the company and its franchisees in a £600-million reinvestment in its estate over a three-year period, featuring strategic moves such as the rollout of table service, the introduction of gourmet ‘Signature Collection’ beef burgers based directly on customer feedback, reduced sugar and salt content to suit a more health-conscious generation of consumers, as well as the option to order and customise meals via self-service touch screens.
“Our Signature gourmet burgers are proving popular; we currently have them in more than sixty restaurants in the UK, and we are going to roll that out further this year. On top of that, we continue to expand our menu through the promotional calendar we have, introducing new blended ice drinks, smoothies or frappes through the summer, but also continuing to focus on what really matters to our customers around nutrition and choice,” says Paul.
More than 10 years of continuous sales growth
Developing and fine-tuning strategy is not a simple operation, with McDonald’s executives seeking to investigate the competition and run focus groups and programs to gather feedback from customers, while also liaising with a number of external stakeholders and supply partners to keep on top of the latest industry trends. This process is carried out in January of every year to confirm, or reconfigure, medium-term growth strategies. The process has proven a success too, with forty-two consecutive quarters — more than ten years — of continuous sales growth.
Whether it’s our free-range eggs, our 100-per-cent British potatoes and beef, or the RSPCA-assured pork — what we deliver is the real deal.
Solid business metrics are one thing, however Paul remains unsatisfied with the public perception of the McDonald’s brand. “We still need to accelerate our brand health. If you look at our business metrics, they are probably the best you would see from any UK retailer, and I am very proud of that, but existing perceptions mean our brand is not as strong as our business results,” says Paul. “I would love to lead the business into a position where brand metrics are as strong as our business metrics.”
To tackle this, Paul has been very active in the media in a bid to bust the many myths around the quality and origin of McDonald’s ingredients. In particular, rumours around the quality, sourcing and make-up of McDonald’s food products have been a cause for concern for the brand, with some people speculating that the meat used is either unethical or spurious. “I want to really tackle these myths around the business, and I get very irritated when people develop an idea of McDonald’s without actually knowing the facts,” says Paul.
The horsemeat scandal that swept through Europe in 2013 was surprisingly useful in demonstrating these facts, as McDonald’s sales were largely unaffected. Widespread industry testing and investigations revealed no compromising details around the quality and accuracy of McDonald’s UK supply chain. Though satirical and fictional news sites released reports of the restaurant containing horsemeat, or worse, many online users thankfully waved these off as a hoax, as it was presented alongside equally incredible reports of the rise of Ebola zombies, Kim Jong-un’s Olympic victories, or Steven Spielberg being caught hunting dinosaurs.
“It’s time to get our side of the story across, and part of that is that we really pride ourselves in working with our long-term farming partners, and our quality sourcing,” adds Paul. “Whether it’s our free-range eggs, our 100-per-cent British potatoes and beef, or the RSPCA-assured pork — what we deliver is the real deal.” The retailer is also hoping to demonstrate its support of local agriculture as it has around 17,500 UK farmers in its supply chain and around £1 billion of investment in the region’s economy. McDonald’s has also implemented its Progressive Young Farmer programme, designed to support new agricultural talent in the pipeline and offer career opportunities.
“I want us to keep moving forward on our ties with the farming community. Making business decisions that are good for long-term agricultural markets and local farmers is important. We need that as a UK PLC, because the UK economy needs a strong farming community, and this is important to our customers as well,” says Paul. A preconceived notion around the quality of employment within McDonald’s is also a bubble Paul hopes to burst. McDonald’s UK spends more than £40 million a year on training and development for its staff, not just in general service but also in terms of gaining nationally-recognised qualifications, to help with career progression and opportunities within McDonald’s and beyond.
Since 2006, more than 63,000 qualifications have been achieved by McDonald’s UK staff, including 21,795 Maths and English qualifications. More than 17,500 apprentices have earned their Intermediate Apprenticeship in Hospitality and Catering, while more than 10,500 employees have achieved a Level 3 Diploma in Shift Management, which is equivalent to an A level. McDonald’s UK has also been recognised by The Sunday Times’ ‘Best 25 Big Companies to work for’ for five years running, as well as being recognised
by the ‘Great Place to Work’ awards, as a certified ‘Top Employer’, in Fortune’s ‘Most Admired Company’ list, and as one of The Times’ ‘Top Graduate Employers’.
“That’s not something that people would expect from McDonald’s. I really wanted to be at forefront of that and talk zealously about how good we are to our staff,” says Paul.
Achieving ten years of sales growth doesn’t happen by chance. It’s because we are passionate about investing across all areas of the business, including heavy investment in our long-term suppliers.
Passionate about people and talent development, this CEO has personally instigated strategic moves on pay increases and flexible contracts for staff. With the UK Government recently legislating a National Living Wage, workers aged 25 and over are entitled to earn a minimum of £7.20 an hour, but when this was implemented, Paul ensured McDonald’s staff aged under 25 years also benefited from the policy.
“We gave the biggest pay rise to our youngest crew, with a 14-per-cent raise for those aged between16 and 18, and an average 10 per cent pay rise across the whole company. I was really pleased with the franchisees who worked with us on that journey,” says Paul. He has also left all the company’s benefits intact, including free lunches and premiums for working overnight. McDonald’s has also offered staff on zero-hour contracts the chance to move to fixed hours after a consultation period; an opportunity that 20 per cent of staff on zero-hour contracts have taken up. Paul’s focus on investing in and backing his people saw him named as a finalist in the ‘Most People-Focused CEO’ category of the HR Excellence Awards this year.
Moving forward, Paul will be working closely with McDonald’s UK suppliers to keep up-to-date on growing market trends within each different specialism, as well as garnering continuous feedback from customers around new and future changes. “We get a lot of input, and my job is to take this big funnel of ideas and put it through a typical planning cycle where we break it down into the five Ps — place, people, price, promotion and product,” says Paul, who is confident that the business will continue to thrive, along with its strong partnerships with suppliers.
“Achieving ten years of sales growth doesn’t happen by chance. It’s because we are passionate about investing across all areas of the business, including heavy investment in our long-term suppliers,” he says. “We don’t flip flop around with our supply chain, many of our partners have been with us for forty years. We pride ourselves on long-term commitment to both our supplier chain and with our franchisees, with which we have twenty-year individual contracts.” Paul adds that this doesn’t mean that McDonald’s has never had to navigate through choppy waters with a long-term supplier, but rather that they always try to work together to reach resolutions that suit all parties.
Forming relationships with suppliers ‘a bit like a marriage’
“Building a relationship with suppliers is really simple; it’s a bit like a marriage. You have to take time to select the right partners and then you really have to commit to that relationship for the long term,” says Paul. That doesn’t mean we are soft as a customer — of course I demand the high standards and the best price — but our suppliers know that they are in the relationship for the long term and they know that we are not going to cut them out of our supply chain if we have short-term issues.”
The benefits of fostering longstanding partnerships also means more solid guarantees around durable income streams for suppliers, with those benefits flowing on to McDonald’s and its customers. “That is critical because they can invest in new technologies to improve the quality of our food. For example, we opened the brand new bakery near Luton last year, and the supplier that provides our bread was happy to invest millions of pounds into these sites with the understanding that McDonald’s has a history of strong growth that we hope to continue in the long term. So there is a real benefit in that and they then take higher risks because they know there is security with us.”
‘You’ve got to stay at the forefront of what matters to the customers’
By the end of 2016, McDonald’s UK will have completely re-imaged approximately 700 of its restaurants, while more than 400 restaurants will have introduced table service, and around 150 restaurants will be selling the Signature range of gourmet burgers. Throughout 2017, the business will continue to expand these figures, as well as continuing to refresh its approach to food and service in general. “I am really excited about the way in which the business is running. We have real commitment from our suppliers and our franchisees and if I can nurture and steer that passion to keep investing in what matters to our people and our customers then we will see great things going ahead,” says Paul.
“We want the 3.7 million people that come to us every day to keep coming to us. There’s no one silver bullet for success, but what matters most to the customers is critical to our future, because we have to keep changing in this very competitive environment. It doesn’t mean you change the heart of your business or rip up the rulebook, but you’ve got to stay at the forefront of what matters to the customers,” he adds. Though he claims to be incredibly proud of all that the company has achieved during his twenty years of service, and in particular the new measures he’s implemented himself, Paul says he won’t rest until the McDonald’s brand is reinvented.
“When I look back on my career, if I can achieve that — whether that is us being seen as a credible employer, or being recognised for the quality of the food we serve and the way in which we care about local farming — if all of those metrics add up to us having a very strong brand score, that will be the icing on the cake for me.”