"I was desperate for some money and there wasn't much else
going", said Clare, a 17-year-old who worked in the Brighton McDonald's.
"I was getting £1.58 an hour, I worked 40 hours a week and was
rang up on my rest day to go in. It was awful work. But there's nothing
at all for 17-year-olds. I don't know how the government expects you to
When were you last in McDonald's? You may relish a milkshake and Big
Mac, despise it as junk food or be dragged in by your kids.
hate McDonald's you'll have noticed the young faces at work. But have you
ever wondered why they're running between the burgers and fries? What the
stars pinned to their uniforms mean? How often it's a new face cleaning
up your empty cartons and ketchup?
In the minute it takes you to read this page 13,000 people around the
world will have eaten in McDonald's. That phenomenal success has been
built on the backs of people like Clare.
This report takes you behind the counter in search of their recipe for success.
The spotlight is on McDonald's employment practices and what they mean for
workers, trade unions and local councils against the backdrop of the growing
service sector in Britain today.
Published by TICL, Transnationals Information Centre London, September 1987.
Designed by Marta Rodriguez.
Typeset and printed by Calvert's Press, 31/39 Redchurch Street, London E2.
1. McDonald's: From Local Store to Transnational
The rise of Big Mac is one of the all-time success stories of US corporate
history. In 1955 milkshake-machine salesman Ray Kroc took out a franchise
on a hamburger store owned by two McDonald brothers. Today McDonald's is
the largest fast food operator in the world.
Thanks to its 560,000 employees, last year the corporation made $1.32 million
profit a day. The chain has grown by one new outlet every 17 hours for the
last decade, with earnings growth of 15% a quarter until last year. Its
golden arches span 45 countries with 9,410 outlets serving 19 million people
every day. "And we will continue to dream," says the corporation,
"to pursue opportunity wherever it leads us . . . the sky's the limit.
And even that may not he true."
McDonald's is the world's largest owner of retail property. In 1986 their
property was worth $4.88 billion on the hooks
- the market value is even greater. Rentals bring in a staggering 90% of
profits from the franchised outlets on which its phenomenal growth has been
built. McDonald's is a property company which sells hamburgers.
The US forms the bedrock of the McDonald's empire, with 7,272 outlets compared
to 2,138 abroad. It controls 20% of the hamburger market - more than Burger
King and Wendy's combined. Over 7% of all Americans get their first job
under a McDonald's cap. But its influence on the economy goes beyond the
outlets: it is the biggest meat purchaser and accounts for 5% of Coca Cola's
Industry analysts have long predicted a glut in the US market. Growth is
down to 1% pa from 3% in 1983 and competition intensifying. However McDonald's
chairman Fred Thrner dismisses any suggestion of saturation: "It's
just not a problem. For the foreseeable future, McDonald's can clearly grow
at a satisfactory rate. Will it be 10,12,14% a year? I expect it will be
in that range." To maintain that growth the corporation is introducing
a steady stream of new products and looking beyond its traditional sites.
But the key to McDonald's future lies overseas.
McDonald's landed in Canada and Puerto Rico in 1967. Today 23% of their
outlets are outside the US. The corporation plans to make it 50% by the
year 2000 with international sales outstripping the American total.
Flying the McFlag Overseas
Penetrating an average of 5 new countries a year the Big Mac is becoming
as ubiquitous as Coca Cola. Their most recent coups were in Yugoslavia and
Hungary where joint ventures begin this year. Even the Soviet Union which
once branded McDonald's as an "exploiter of child labour" is now
willing to embrace the Big Mac.
Asia is the fastest growing market with 100 openings ayear.
But expansion will continue to focus on the countries which make up the
bulk of its overseas sales:
- Japan (573 outlets)
- Canada (515)
- West Germany (245)
- UK (231)
- Australia (183)
Transplanting the corporation's formula abroad is fraught with difficulties.
Gaining government approval and winning over foreign consumers demand massive
investment and lobbying - it took McDonald's several attempts to break into
Australia. But the biggest problem is replicating its stringent control
over supplies and distribution. In Thailand it's busy persuading farmers
to grow the special Idaho Russet potato required for all its French fries.
The payoff is slow. In some countries profits can be 10 years in coming.
Industry analysts estimate that in 1986 profits averaged 19% of international
sales as against 26% in the US. But profits improve once the high start-up
costs are spread over more outlets, as in the Big Five today. "We view
our investment in international operations as longterm, ' says the corporation.
"Consistent and steady increases in profitability has confirmed that
this expectation is both realistic and achievable."
To maximise profits and minimise the high risks, the corporation operates
through a combination of franchising, joint ventures and company-ownership.
Setting up Shop
Franchising accounts for 75% of outlets and was the vehicle of US growth.
By using franchisees' money as down-payments, and borrowing the rest, McDonald's
amassed its property without spending a dime. The corporation, which takes
11.5% or more of sales, has adopted this approach in Japan, Canada, Latin
America, West Germany and Australia. Affiliates (where McDonald's has less
than 50% equity) and joint ventures are the order of the day in Asia, while
the UK chain is almost completely company owned. The strategy in each country
is determined by local considerations - which can demand a mix of company
and franchised outlets, as in Canada.
In Paris, McDonald's cancelled its franchise agreement after winning a court
case. According to the Daily Telegraph (2.9.81) the Paris franchise was
licensed to pay royalties at only 1% of gross sales, while takings were
twice the average rate of overseas trade. And in the UK, where McDonald's
started with a joint venture, it later bought out its partners.
A tight rein is kept on all foreign operations. The corporate ethos and
management system are rigidly imposed, detailed operating manuals followed
to the letter and an extensive field organisation checks on each store to
enforce standards. All foreign operators attend Hamburger Universities and
international sessions with other members of "McDonald's Family".
Corporate strategy hinges on other policies born in the US and shipped around
Refuelling the McEngine
* "Today our concept of real estate knows no limitations",
said their 1985 Annual Report. "There is not a corner we will not explore."
McDonald's is expanding beyond its traditional suburban sites into higher
cost, higher volume sites. It's chasing contracts in lucrative semi-captive
sites - in museums, airports, parks, hospitals, even Japanese apartment
buildings. In 1983 the US company stunned its competitors by offering double
their bids to install 10 McStops on State tollways. It isn't hard to fathom
out why: sales at such locations are a third more than average. McDonald's
is also talking with other corporations about opening up in their canteens.
The all-American transnational is joining forces with Uncle Sam. Arch rival
Burger King beat them to a contract for Army and Air Force installations
and since 1984 has moved into the UK bases. But McDonald's has captured
300 US Navy and 3 Marine bases at home and abroad. By 1986, 44 had opened
in countries including Bermuda, Puerto Rico and Cuba. Although costs are
greater, turnover can be twice the average $1.3m of other outlets.
Prospects in Britain must be inviting as public services are privatised
and company canteens turned over to outside contractors. And although it
lost the prestige site at Gatwick Airport to Burger King and Trust House
Forte muscled into British Rail, it's there to welcome you to Frankfurt
* The relentless drive to maximise sales at existing outlets
is central to maintaining McDonald's growth and competitive edge. In 1986,
35% of total capital expenditure, on $333m, was reinvested in existing outlets.
And this is exclusive of the millions of dollars spent by franchisees and
Reinvestment concentrates on introducing state-ofthe-art technology to reduce
cooking times and on interior remodelling. The current trend is to create
a "more inviting ambience for adults" as in the slick revamped
Oxford Street store. Not that the corporation is abandoning its most important
customers: more children's Playlands are also being dreamt up.
* New products are constantly introduced to pull in customers
without biting into burger sales. Recent appetisers include the Egg McMuffin
and the McDLT sandwich - "The Hot Stays Hot, The Cool Stays Cool"
which British palates are putting to the test. Other treats in store for
us are the pocket size McPizza and a Chicken McSwiss.
McDonald's revolutionised the fast food industry What Ford did for the motor
car and manufacturing, McDonald's did for the hamburger and catering. They
introduced a new production process: standardised products, technology which
eliminates skill, and flexible labour practices were integrated into a competitive
strategy with universal application, The corporation attributes its success
to the cherished motto: Quality, Service, Cleanliness and Value. But Control,
Planning, Productivity, not to mention strict Labour Control, would be nearer
Recipe for Success
From London to Singapore the assembly line produces identical Big Macs.
Standardisation and higher productivity are ensured through new technology
and the systematic planning of each job, broken down into the smallest of
steps. The corporation emulated the scientific management of manufacturing
industry, For their new Series 80 outlets: "The company's industrial
engineers measuring in seconds of time, used computerised timestudy methodology
to plan the equipment layout and work scheduling." Their aim: "to
take the guesswork out of food preparation, applying sophisticated procedures
that geometrically increase productivity,"
Workers' skills are eliminated. They perform routinised tasks learnt in
a day: to prepare and bag French fries workers follow 19 carefully calculated
steps. This deskilling leaves McDonald's free to pursue a cheap labour policy
which keeps costs down and enables it to hire and fire workers as demand
The corporation transformed fast food into a hi-tech industry which combines
automation with flexibility, They invented the world's first French fry
computer and a solid-state timing device which buzzes when burgers need
turning. "New devices are coming in all the time", said one British
store manager. The latest "clam-shell" grill which cooks burgers
on both sides at once, slashes cooking time from 130 to 40 seconds.
The revolution in fast food production has dramatically transformed our
eating and drinking habits. Instead of meeting individual customer's desires,
McDonald's awesome advertising machine creates international demand for
its identical products. One twentieth of the cost of a hamburger is spent
on persuading us to buy it.
McDonald's spends more on advertising a single brand than any other organisation.
In 1986 a colossal $789m, or 6.3% of systemwide sales, went on advertising.
It is one of the five largest television advertisers in the US, with children
its prime targets. After Santa Claus, the corporation's key prop Ronald
McDonald is the figure best known to US children.
Saatchi & Saatchi once ran McDonald's UK publicity. Between 1982-84
advertising expenditure doubled to £6.4m, more than all the other major
chains combined. "Advertising is like the arms race", says Burger
King's Chairman. "Once you start there's no way to stop".
Tight central control is at the heart of McDonald's production process.
Computerised tills record sales by item: every time a burger is sold it
calculates how many are left in stock and how much money the store has taken.
The terminals report back to Head Office. On any given day corporate HQ
outside Chicago can tell you the demand for chicken McNuggets in Guam or
Filet-o-Fish in Alaska. Hamburgerologists then analyse the results at Hamburger
University 15 miles away.
Central control extends to their suppliers. McDonald's imposes exact specifications
on everything from plastic straws to the 13.33% sugar content in the buns
and with the help of computerised stock-taking, minimum stocks are kept
in the valuable high street stores.
In these ways McDonald's pioneered a unique combination of the old American
mass production of deskilled assembly lines with the new Japanese flexibility
of both production and the workforce and control over supplies.
McDonald's is only McDonald's
Fred Turner says McDonald's will keep looking for new markets and new ways
to expand its basic business. The corporation has no plans to diversify
despite offers, including one from Walt Disney Productions. As Turner has
said: "We can maintain a growth rate in the teens throughout this decade
. . . it makes the question of diversification beside the point."
McDonald's is only McDonald's, giving it an edge over its competitors who
are part of massive conglomerates. The top executives, insists Turner, are
"psychologically committed" to burgers and fries.
They uphold Kroc's motto:
"I believe in God, family and McDonald's - and in the office
that order is reversed."
2.Britain under the Golden Arches
In 1974 McDonald's opened its first UK restaurant in Woolwich. Over 1,000
Americans flew in to be greeted by the Mayor. Despite the razmataz and the
offer of free meals, customers were nowhere to be seen - the day's takings
totalled just £39.41. After 231 openings the picture couldn't be more
different; in 1985 the computer reading showed a turnover of £149.7m.
Few could have foreseen their spectacular rise and the high street revolution
that was to sweep Britain's fast food industry, Today the companies are
battling it out for the British people's hearts and palates.
The fast food industry is booming. Worth £1.6 billion a year it has
grown by 150% since 1972. Fish and chips are still the people's choice,
with a third of the market. The 9,000 mainly independent operators (chippies,
Indian and Chinese) still account for 60% of the take-away market but are
rapidly losing out to the new-style multinational chains.
Battle for the Market
Fast food chains are making a "scandalous" profit on chips, according
to the Budget Food Guide, 1987. The smallest portion they found was 3 ounces
at McDonald's in the Strand.
The shift was accelerated by the 1984 imposition of VAT on hot take-aways
which had a selective impact on the industry, Worst hit were the traditional
fish and chip owners, who have 82% of their sales as take-aways and cater
to more price sensitive consumers. But the large chains the likes of McDonald's
and Pizzaland escaped unharmed. Much of their sales being eaten on the premises
(67% for burgers and up to 80% for some pizza outlets), they were already
Since the 1970s and the new era of American-style fast food, the transnationals
have forged ahead. McDonald's leads the pack, meeting an expansion programme
of 30 outlets per year since 1982. Its main competitor Wimpy, bought by
United Biscuits from Lyons in 1976, has the most outlets; in 1986 its trading
profits climbed by 19% to £5.1m. The pizza chains have also tasted
success and are expanding even faster than the burger houses. Pizza Hut
UK quadrupled its sales between 1982-84 and plans to open 250 outlets in
the next 5 years.
High Street Manoeuvres
Competition for a chunk of this profitable market has intensified with even
the large chains under pressure. Mega-partnerships and takeovers of companies
unable to stand the pace are the order of the day, And the casualties have
increased in the scramble for prime London sites:
United Biscuits took over Garner's Steak House to make room for Pizzaland.
The British market has assumed greter importance to the multinational chains
as growth in the US slows down. But the stakes are high with returns on
substantial investments some time in coming. By November 1986 McDonald's
had laid out £230m and only just moved into the black. The same year
Wendy's sold their 16 loss-making outlets to Whitbread who are converting
them into their Pizza Hut and Quick chains. Danny Lynch of Wendy International
explained: "There is growth in the UK market, but it is all about critical
mass, that is, sufficient outlets to become more cost-effective. For us
to do that in the UK would cost a considerable amount."
As a way into the market, the big US foodservice operators are signing master
franchise deals with their UK counterparts to develop chains in partnership.
Whitbread operates Pizza Hut in the UK under franchise from PepsiCo. The
combination of muscle, local knowledge and an established chain identity
enables them to achieve the rapid expansion which has become imperative.
In 1986 PepsiCo took over Kentucky Fried Chicken (KFC) from Nabisco for
$570m. Analysts are confident that PepsiCo will revive KFC's flagging fortunes.
Even before completion of the deal, negotiations began with Trust Hous Forte
(THF) for management of the 356 British outlets. THF, who now own 50% of
the British KFC, had been looking for a way into high street catering, having
already established a monopoly on A-roads with both the Little Chef and
Happy Eater. Acquired in 1986, the Happy Eater had changed hands 3 times
in as many months, a fate symptomatic of the industry today.
"We take the business of making hamburgers", say McDonald's, "more
seriously than anyone else." Hamburger University in Finchley where
managers study hamburgerology may sound far-fetched but behind the hype
is a hard-nosed professionalism. As one former Burger King executive said:
"Is the service quick? The fastest. Are the restaurants clean? Immaculate.
You have to give McDonald's credit for knowing exactly what they're doing."
Even with half the outlets of Wimpy, McDonald's 1985 turnover was £47m
The Big Mac Revolution
A McDonald's store manager explained: "The other big chains just can't
handle the turnover of McDonald's. A colleague of mine went to work for
one of our competitors and he couldn't believe how easy it was! At McDonald's
everything is very tight. Waste is counted every 2 hours, yields such as
number of milk-shakes from each packet are worked Out weekly, and control
over labour costs is extremely tight." Another London manager agreed:
"There's pressure on everything - labour costs, food, soaps - to make
as much profit as possible."
Its British competitors are still reeling. Forced into rethinking their
strategy, they are now seeking to reproduce the McDonald's recipe for success.
Wimpy have launched a major campaign to upgrade their customer appeal and
hopes that: "The poor image which bedevilled Wimpy has been lain to
rest." They are busy replacing their old-style table service with counter-service
outlets which, still only a quarter of all their units, already take 50%
of their sales. Likewise KFC, whose takings have fallen on its take-away
stores in secondary locations, is moving into high street outlets with seating
and a revamped image. Both companies are ruthlessly weeding out their less
In the US McDonald's depended on franchisees to achieve rapid expansion
at minimum cost. But its UK outlets are company-owned. Although McDonald's
promised franchised outlets for years, the first 2 opened only in 1986.
Company Control versus Franchising
According to Wimpy who, like KFC, grew through franchising: "There
has been a growing tendency over the past five years for corporate organisations
to invest in the system." Company ownership guarantees total control
and as Whitbread's Planning Director said: "If you can do the development
alone, you can take all the profits. As long as we can develop alone and
have access to sites we will do it that way, but we might consider franchising
for geographical areas that are difficult to penetrate."
McDonald's first two franchisees in Hayes, Middlesex and Kingsbury, North
London will be carefully monitored. "Franchising has not come to UK
in a big way" said one store manager, "because company stores
make so much money. I expect they'll eventually sell off the quieter company-owned
stores. McDonald's claim to be franchising 5 more restaurants Out of the
35 openings planned for 1987.
A McDonald's UK franchise agreement runs for 20 years. Their control remains
total, from selecting and owning the site to supplying all the goods. The
franchisee invests £250-350,000 depending on the store's size and location,
pays a £10-12,000 joining fee, and a percentage of sales in annual
royalties. "The prospects are good" said one manager. "One
in 4 US franchisees is a millionaire!"
Building the Arches
McDonald's move into Britain was initially cautious. Bob Rhea, a former
US franchisee, established a UK associate - McDonald's Golden Arches Restaurants
Ltd. He held the majority equity together with his finance director, an
investor with real estate experience. McDonald's stake was 45%. When the
agreement came up for renewal in 1983 the profitability of over 100 restaurants
had been proven. McDonald's bought full ownership and registered the now
wholly-owned subsidiary as McDonald's Hamburgers Ltd.
In its early days, McDonald's imported some equipment and food supplies
from the US. But this increased costs and left them vulnerable: during a
dockers' strike in the early '70s they had to airlift frozen French fries
from Canada. "We became master importers," said Rhea. "We
decided we were going to duplicate the McDonald's system as it existed in
the US or die trying."
The problem was finding suppliers able or willing to meet their standards.
At that time the British food industry had little faith in fast food - one
major meat manufacturer turned McDonald's down. Yet today McDonald's is
Britain's largest beef purchaser. Buns also proved difficult, with two consecutive
suppliers failing to meet its quality specifications.
Setting up their own suppliers became imperative. In 1978 they registered
McKey Food Service Ltd to provide burgers. McDonald's owns 72%, in a joint
venture with Keyston Foods, a branch of British Northern Foods. The company
claims the Milton Keynes plant is the most advanced in Europe.
Golden West Foods: Buns, ketchup, syrup, milkshake mix
3 Cherrytrees Lane
Employs 235 and a further 50 drivers, 40 warehouse people and 10 on vehicle
McKey Foods: Burgers
McCain Foods GB Ltd: Chips
Sun Valley Chickens Chicken McNuggets
Employs 2,500; TGWU union membership
Icelandic Freezing Plants Ltd: Fish
South Humberside Industrial Estate
Beswicks Ltd: Big Mac and Tartar sauce
AutobarVendakeke Ltd: Cups
F. Bender Ltd: Napkins
Clifford's Dairy Products: Milk (for London and the South)
Drivers in TGWU
Develey GnbH: Pickle
D-8025 Unterhaching Munchen
Sweetheart International: Ronald McDonald cups and straws
In 1976 Golden West Foods was set up in Hemel Hempstead to supply buns,
muffins, ketchup, syrup and milkshake mix. Still expanding it is already
the UK's largest producer of hamburger buns making 2m weekly and supplying
McDonald's in Europe. In 1985 it too became a subsidiary when McDonald's
increased its ownership from 45% to 60%.
Golden West undertake McDonald's deliveries. Other suppliers off-load at
a central depot from where Golden West lorries dispatch to all stores. As
the company expands north, a new distribution unit is to open in Rochdale.
While its rivals depend on a number of suppliers and none of them have their
own central distribution network, the McDonald's system guarantees total
control over quality, costs and labour.
According to management a further 6,000 secondary businesses supply the
company with everything from lettuce to window cleaners. Chips come from
McCain Foods GB Ltd in Scarborough who prior to coming to the UK serviced
McDonald's abroad. Pickles prepared to an exact thickness and diameter come
from Develey, a German firm which supplies McDonald's in 4 other European
countries, and a Dutch firm, Sweetheart International, provides the Ronald
McDonald cups and straws. Cheese and apple pies, on the other hand, are
exported from the UK.
Buying up Britain
In 1985 McDonald's land and buildings in this country were valued at £160.2
million. As it expands, a lucrative property base is accumulating fast.
Significantly, in 1984 a separate property company was formed to which all
its property and equipment was transferred.
Little more is known. As a subsidiary wholly-owned by the US corporation,
it does not have to publish annual UK reports. Accounts are available but
the latest information is for 1985, and the company would not divulge more.
In 1985 they owned £67.3m worth of freehold sites always McDonald's
first choice, failing which they'll settle for leases of at least 20 years.
Finding suitable sites is problematic as average high street restaurants
don't meet their minimum needs of 4,000 sq ft. Smaller supermarkets are
ideal, although the change of use applications invariably run into local
opposition (see Chapter 7). Larger sites are split into several units and
sublet. The London Wood Green outlet is on a 25 year lease from Tescos and
former Woolworths are attractive sites.
We can only speculate on the income earned from property. But renting out
space in their buildings, especially in central London, must pay massive
London forms the hub of McDonald's network. Their advance began in prime
or near prime sites within the Greater London TV area - an indication of
the key role accorded to TV advertising in overcoming initial consumer scepticism.
By March 1981, they had invested some £35m in developing 53 Greater
London sites. Today their London chain totals over 90, of which 15 are in
the West End and the City, and management still sees: "substantial
scope for expansion, especially with drive-thrus."
Driving in the fast lane
They then gradually penetrated the south east, motored up the M1 to the
Birmingham area, and then across the MG to Blackpool and the North West.
Next on route is the North East, first stop Gateshead's Metro Centre - and
it's a short drive across the border into Scotland. Expanding at a rate
of 30-35 outlets a year the company says: "Our long-term aim is to
have a McDonald's restaurant in every community in the UK large enough to
These geographical shifts run through the whole industry. The race is also
on for free-standing outlets and drivethrus catering to the "car-borne
customer". The current trend in retailing towards large edge-of-town
shopping complexes has been a fortuitous development for fastfood chains:
prime sites are coming onto the market as the supermarkets move out of the
high street, while the new complexes provide a lucrative semi-captive market.
3. Working for Big Mac
The Hamburger Economy
McDonald's directly employs 19,000 people in the UK. Since 1983 the workforce
has increased by 61%, with 4,000 people coming onto the company's payroll
last year alone. Today it is one of the biggest employers in London having
over 7,000 employees, with seasonal variations. And it intends to continue
expanding as fast in the future.
The fast food industry is one of the few growth areas of the economy. Mrs
Thatcher has presided over the decline of Britain's manufacturing base,
mass unemployment and the rise of a new economic saviour - the service industries.
Jobs in tourism are now three times the number in the car industry. Jobs
in hotel and catering including fast food - account for 5% of all employment
and are touted by YTS as the hope for the young unemployed.
More than ever before, the labour market has been divided into a dwindling
permanent workforce and a growing reserve of part-time, casual and temporary
workers. One in 4 workers are part-time, and of those, 90% are women. Nurtured
by the Tories' attack on workers' rights and cheap labour policies. flexible
work is becoming the fast food of more and more employers.
Amongst the benefactors are the multinational fast food chains. Despite
their unprecedented advances in recent years, the wages and conditions of
their workers are among the worst in the country.
McDonald's aims to keep labour costs within 15% of any outlet's sales. "It's
very tight", said one store manager. "If sales are down, labour
costs must come down: you have to cut the staff and make those remaining
"Labour is the big one we hear about from head office", another
manager explained. "A really high volume store could run at 10% labour
because the bodies are always in motion. But in a quiet store you still
have to keep a foundation crew which is why labour slips up occasionally
to 16-16 1/2%. The pressure to keep labour costs down means having less
bodies in the store, so we're running around all day, all night. Otherwise
labour would be right through the ceiling."
To stick to the 15% rule, high productivity is extracted from a "flexible"
workforce of part-time and temporary workers, mostly youth, blacks and women.
They work unsocial hours with no security for low pay.
Young, Female, Exploited and Black
McDonald's depends on young workers to keep its labour costs down. Some
32% of the workforce are under 18, many still at school, and 75% under 21.
Hiring anunder-18 year old saves McDonald's 52p an hour. And with the government's
abolition of wage protection for workers under 21 those savings could increase.
"We're under pressure from head office", said one store manager,
"to hire as many under 18 year olds as possible and we worry more about
them leaving. Even if we give 20p an hour extra to keep them on, we cut
McDonald's recruits from other groups discriminated against in the labour
market. It feeds on foreign visitors, women, students and ethnic minorities
who, with few other opportunities, are forced to accept the poor wages and
McDonald's has no specific figures available but in hotel and catering as
a whole people from ethnic minorities are twice as likely to be employed
as white workers. "We don't look at people's colour or nationality",
said one manager, "but their availability."
With teenagers hard to find in suburban USA, McDonald's is going all out
to recruit senior citizens. TV ads encourage them to sign up under the McMasters
programme. Some 10% of the workforce are now over 50 and 5% over 60. The
company believes they are no more demanding than young people and more efficient.
A new McDonald's opened in Holborn central London on Christmas Eve last
year. Unable to predict volumes, management took on large numbers of Italian
students, whom they soon "got rid of". Now they have "settled
down" to 120 crew and 8 managers, all under 26 years. There are only
35 full-timers. But as one manager said: "We don't have full and part-timers
here. Everyone at McDonald's works flexible hours."
Although an average store has 80 people on its payroll, 80% of McDonald's
staff are part-time. The company says an average crew member works 25 hours
a week. But many work more.
Those who work less than 16 hours are outside the protection of most employment
legislation. Until they clock up 5 years' service they have no rights to
redundancy or maternity pay time off for trade union activities, or to claim
for unfair dismissal (except for union membership). Britain is one of the
only European countries to limit the legal rights of part-timers.
The Liqour Trades Union in Australia has received complaints that workers
are dismissed when nearing their 20th birthdays to avoid paying adult wages.
Youngsters scheduled when business was slack had to fold boxes. They were
not paid for this. It's hardly surprising McDonald's reported difficulties
in getting Australian workers to smile!
Shifts last 6-8 hours any time between 7am and 2.30 the next morning. Stores
serving breakfast have staff round the clock, cleaning through the night
for the 6.30 opening. Every 6 hours workers have one 45 minute break - unpaid
- but they often have to remind managers to let them off.
Only a skeleton staff is scheduled for each shift as a matter of deliberate
policy to keep costs within the 15% ceiling. "We are always under-staffed".
Nobody has set times and managers draw up the rota each week. "We schedule"
said one, "for our needs not theirs." Workers can state their
preferences, but much depends on whether you're in with management. Unfavoured
workers might not get the hours or better paying shifts they want. This
"flexibility" also makes it difficult for those claiming the State
benefits needed to supplement their low income, as they cannot say in advance
the hours they work.
By employing part-time workers, many of whom effectively work full-time,
the stores can cover unsocial hours without paying overtime and can adjust
workers' hours on a weekly or even daily basis as sales and staff numbers
McDonald's Crew Handbook spells it out: "Your hours of work cannot
be permanently guaranteed because the number of staff we can employ depends
on how busy the restaurant is. Sometimes it is necessary to increase or
reduce the number of hours you work to take these fluctuations into account."
Julie works in an outer London store: "Yesterday I was meant to go
home at midnight, after working 8 hours. But they were short-staffed and
asked me to clean up until 2.3Oam. I didn't want to but there was nothing
I could do. Same thing happened night before. Lots of us are working 12
hours sometimes without proper breaks. One woman has done 86 hours over
her scheduled time in the past 3 weeks! John hasn't had a day off for months
- they keep ringing him up on his rest day - and a bloke who refused to
come in one Saturday was reported to head office."
"Flexibility" amounts to an absence of job security. Workers taken
on for seasonal peaks are laid off when the pace slackens.
This explains McDonald's lack of concern about its high staff turnover.
Within a month, 7 out of 10 starters drop out - you're a veteran if you
last 4 months. In London this means a staff turnover approximating 200-250%
a year and every single store permanently advertises vacancies. According
to a local manager: "No-one ever stays more than 6-9 months unless
they want to go into management. It's the pressure, heavy hours, awful pay
and it's a degrading job - having to clean tables and scrub floors in front
of all the customers - and always having to smile. People get really fed
A senior personnel manager said: "I wouldn't say we have a very high
turnover of staff. Some turnover is in the nature of the business and it's
not a problem for us." There is a constant pool of unemployed to draw
upon and the unskilled jobs are soon learnt. Indeed high turnover offers
positive advantages: flexibility is maintained, workers kept on the lowest
rates with few rights and the door firmly shut against unions.
Attacking Workers' Rights
McDonald's policies epitomise the "flexible workforce" strategies
employers are pursuing to reduce labour costs and union strength. In the
cold language of employers, it means maintaining a "core" of permanent
workers supplemented by a "periphery" of part-time and temporary
workers. A spate of Tory legislation is removing all protection from the
8 million workers (one third of the employed) in the periphery.
Every fast food worker will lose out under some section of the latest White
paper Building Businesses not Barriers. This includes proposals to:
* Raise to 20 hours a week the definition of full-time work which gives
entitlement to main employment rights.
* Extend from 6 to 13 weeks the disqualification period for unemployment
benefit if people leave their jobs voluntarily or are sacked for misconduct.
Women are directly under attack. Nine out of ten part-timers are women and
since 1979 the number working less than 16 hours a week has risen by 50%.
4. On the Breadline
Lean Pay, Fat Profits
Fast food workers are among the worst paid in the country. Marina, a 17
year old working in a McDonald's outside London, earns £1.58 an hour
- the price of a 100 second sale. Founder Ray Kroc was said to have amassed
a personal fortune of £571 million.
Area Age 7am-7pm 7pm-11pm 11pm-7am
Outside Under 18 1.58 1.77 1.96
London 18+ 2.10 2.35 2.60
London outer circle Under 18 1.62 1.82 2.01
-within M25 18+ 2.17 2.43 2.69
inner circle Under 18 1.76 1.97 2.18
- 15 busy
West End 18+ 2.33 2.61 2.89
Workers are assessed for gold stars and 5-15 pence pay rises three times
a year. Mike had just passed the 3 week probationary period when the manager
left: "The new one didn't like me and said I'd failed so I had to do
another 3 week trial. My mate Orrin has worked 9 months and still not got
a star because he's too mouthy to the managers." And if the store is
doing badly, pay rises can be put off.
Few stay long enough to get all 5 stars. Laxmi got her first star after
3 weeks. The next rise 6 months later brought her pay to £1.74. That's
equivalent to £69.60 before tax for a 40 hour week, and she doesn't
even get those hours. "How can we survive?"
One in ten of all Britain's low paid workers are in hotel and catering.
They are at the bottom of the pay league along with agricultural workers,
cleaners, hairdressers and shop assistants. In London, 80% of low-paid workers
are women and 75% of women working part-time earn less than the poverty
The average adult wage in Britain today is £163; 160 for a 40hour week.
A senior personnel officer at McDonald's said that 70% of the general staff
work part-time. That makes it difficult to calculate the average pay packet.
But assuming Marina works a 30 hour week, she'll get £163; 47.40 before
tax. Sheila is 25 and works in London, 7pm-11 pm, 6 days a week. She gets
The DHSS puts the poverty line at £163; 41.40 for a single person without
dependents. In 1985 some 60% of all women and 33% of men in hotel and catering
fell below this level. And these figures exclude the hundreds of thousands
of part-time women and youths who earn even less.
The Council of Europe's "decency threshold" stands at £163;125
a week. To earn that you would have to be guaranteed 39 hours a week at
£163; 3.25 an hour - a position few McDonald's workers are ever in. And
wages look set to fall still further as Tory deregulation takes hold.
The Unlicensed Place of Refreshment Wages Council regulates fast food chains.
The Councils were established at the beginning of the century to combat
low pay and poor working conditions in order to prevent the better employer
being undercut by the unscrupulous. Since 1945 the Wages Council has specified
legal minimum rates of pay for key sectors of hotel and catering, set at
levels the least efficient can afford. McDonald's has always paid exactly
the legal minimum wage set by the Council.
It is difficult for the Wages Council to effectively monitor the conditions
of millions of part-time and temporary ununionised workers. Under the Wages
Act, employers are legally required to pay an overtime rate of £3.15
per hour if any employee over 21 works more than 39 hours a week.
At McDonald's, in theory and on the schedule no-one works over 39 hours:
the heavy reliance on part-timers is precisely to avoid paying overtime.
But in practice the pressure on meeting targets and last minute scheduling
means that regulations break down.
"You shouldn't schedule people for more than 39 hours," explained
a store manager. "But crew members definitely work more. There's a
woman who for the last month has been doing l2pm-l2am, 6 days a week, including
Sunday and she'll still get phoned up on her day off to come in, but that'll
be up to her. She's doing 70 hours and for the extra 21 or 31 hours she'll
get the normal rate. It happens everywhere in McDonald's that people are
scheduled for more than 39 hours."
The enforcement of the Wages Council's rates has been undermined by a lack
of resources. Since 1979 the number of Wages Inspectors, never high, has
been slashed-there are now 71 inspectors to cover 2.25m workers' pay in
over 375,000 establishments. The Low Pay Unit's latest report The Underpaid
Millions notes that last year only 2 firms were prosecuted out of over 8,200
found to be breaking the law over pay,
Meanwhile the government has increased to 3,000 the number of social security
fraud inspectors. "The poor now know," say the Low Pay Unit/ GMBATU
in Waiting for Change?," that the law will be used against them if
they are unemployed but it will not be used to protect them when they are
Attacking Workers' Wages
However weak, the Council offered some protection; with the 1986 Wages Act
that little is now lost. Given that McDonald's pays exactly the legal minimum,
wages may deteriorate further as the full force of the Act makes itself
It's on the cards that the government will completely scrap the Wages Councils,
which they claim have priced people out of jobs. The Wages Act empowers
the government to abolish individual councils by Ministerial Order without
any public debate in Parliament.
The government claims the measures will create employment. A more likely
scenario is the exploitation of young and part-time workers undermining
the position of adult, full-time workers. Today the vast majority of McDonald's
workers fall outside the scope of any employment protection because they
are either temporary or part-time or under 21. McDonald's is virulently,
and successfully, anti-union. So with no union and no rights, at a time
of mass unemployment, the workers are more vulnerable than ever.
A Manager's View
McDonald's promotes from within, encouraging crew members to work their
way up. One store manager describes his job:
"I started work on the shop floor with no intention of going into management."
Today he is an assistant store manager. "As far as I can see McDonald's
says it is an equal opportunities employer and I think it really is. No-one
has ever held my colour against me. It's really excellent experience. For
crew and for managers, the constant pressure is good if you can take it.
"Yesterday morning I started work at 7.00, went home at 2.00, came
back at midnight to do a stock take and I've been here ever since - now
it's 1.30 in the afternoon. I'm falling asleep. I've been doing 75-80 hours
a week, and the salary's for 40 hours.
"For the hours the pay is awful which is one reason why so many managers
leave. A trainee manager gets $6,500 plus £1,000 London weighting and
an assistant store manager gets £10,500. You get rises once a year
which used to be 10% but now it's on your performance - which depends on
how the store does.
"The constant pressure from head office is awful. You have to keep
labour costs down so in a quiet store managers tie themselves to the stations
and run around like the crew. Why this constant pressure to make as much
profit as possible when they're losing more managers than anything else?
You talk to other managers on courses, and out of 15, chances are 5 will
be on the verge of leaving."
5. On the Burgerline
"12 Big Macs down." I push bun bases in the toaster, right?
"Dress these regulars please." I'm squirtin ketchup when the toaster
start bleepin buns are done.
"Where's the regulars? Speed up!" The guy on the grill is giving
me grief cos meat is burnin and the main man is bawlin at him. Me legs are
jelly, me throat dry and me head's explodin under this stupid cap.
"Why's this cheese on crooked? Give me Big Mac bases now." Outta
onion I run to the freezer.
"What's goin on? You're too slow." I'm pissed off with the man
shoutin orders from the counter an' hate the guy cooking untold burgers.
"Six quarters down." I put frozen burgers on the grill an burn
"Why all this mess? Clean it up." As I start wipin' trays, the
timer flashes meat needs turnin, the toaster's buzzin and someone's yelling
at me to fill up the pickle.
I want to swear at the other crew that I can't do everythin at once but
I just slap crowns on the finished burgers shoutin:
"12 Big Macs up." An all this in 160 seconds!
McDonald's pioneered the process of rationalising production and introducing
hi-tech which has transformed catering into an unskilled job. They combined
the standardised mass production of the assembly line with a flexible response
to momentary fluctuations in demand. For the multinational chains the system
spelt higher productivity and lower wage bills. For workers it spelt a deterioration
in the quality of their jobs.
Hi-tech with No-tech lobs
Catering once depended on the trained chef and apprentices. In McDonald's
those skills have heen replaced by computerised technology, standardised
products and the precise planning of each suhdivided task. There is no room
for creative chefs in this factory workers from Ealing to Outer Mongolia
perform exactly the same repetitive tasks to prepare the same Big Mac.
McDonald's eliminated all demarcations and any career structure based on
training and skills. The chef, assistant chef, waitress, cleaner have been
levelled down to the uniformed crew member. Everyone at McDonald's cleans,
goes on till, on grill, on fries, on lobby. This enables the corporation
to follow the "flexible workforce" strategy on which its profits
"Sometimes I think if you cut a McDonald's employee he would bleed
ketchup." Paul Preston President UK (FT 26.6.85).
Control over the workforce and their productivity is achieved in a number
of ways. Managerial supervision is increasingly exercised by the technology
itself, with innovations to increase the workers' speed constantly being
installed. Computerised machinery regulates the pace of work at each station
to the precise second.
Control is also exerted by the pressure of customers on the skeleton staff.
Customers were timed entering the Birmingham McDonald's at the rate of one
every 10 seconds between 1.00-1.3Opm; and each customer should be served
within 180 seconds. When custom drops, the number of workers and not the
workload is reduced.
The forced pace puts intense pressure on both managers and workers. In the
heat of the moment tempers become frayed and each worker blames the other
for holding up the conveyor belt.
The corporation has fabricated an elaborate system of hierarchies and individual
incentives which keeps the workers smiling at the customers but at each
others' throats. Everyone is assigned to a team of workers at different
levels. For your first 3 weeks you're a green badge; then progress to a
yellow badge and compete for the gold stars awarded for fry, grill, cleanliness,
service and personal. Performance is reviewed every 2 months and pay every
4, stars bringing financial rewards. If you win all five stars you wear
a white shirt, before joining the white badges in line for management. You
finally take off your tag when you become a store manager.
Workers in each grade are accountable to those above and control the workers
below, chasing them to meet production targets. Otherwise they may not get
their stars and pay rises at the next review.
The constant spot checks by higher grade employees increase competitiveness
and the diligence with which workers harass their subordinates. "It's
always everyone for themselves," said one worker. "You get a feeling
noone trusts each other - in case they go to the manager. Whether you get
your stars, or selected for training school or management, doesn't always
depend on merit but whether you're pally with management."
For all the talk of teamwork, McDonald's promotes a cult of individuality.
"Some people wait for the future" they state. "Some people
push it along. We don't have waiters." Pinned on the store's noticeboard
is a list of crew who "did
exceptionally well last week." Down in the crew room another notice
advertises "Crew of the Month" competition with a £10 prize
- more than some workers earn in a day. In their break, workers can flick
through McNews and read how winners of the Swedish "Best of the Best"
competition were awarded a trip to London. The highlight was a tour of the
breakfast shift in Marble Arch.
Further control is exercised and dissatisfaction diffused through periodic
"rap sessions". Central management meet with workers to discuss
their complaints, particularly against store managers. In one store, workers
were hoping to bring up the overtime question but expected the meeting to
be on an unpopular manager. McDonald's insists these sessions make unions
6. Unions Versus McDonald's
Shutting out the Unions
"It's the 150,000 kids out there that make us tick. If the unions succeed
at McDonald's then my job has failed." Jim Kuhn, McDonald's chief management
consultant, speaking about the USA. But it applies equally to the 560,000
employees around the world.
McDonald's is internationally notorious for its anti-union policy. Although
in some countries unions have wrested rights from the corporation, in Britain
McDonald's is proud to say it knows of no union members in its stores or
its own suppliers. Anyone trying to unionise is quickly shown the door.
"The company is totally anti-union", said one manager. "If
you want to start a union, they'll hear about it and sack you. None of the
managers belong to unions either. Not a single one!"
Crusade against "Non-conformists"
"We cannot trust some people who are non-conformists ... We will make
conformists of them in a hurry." Kroc's words were no empty boardroom
Labour Board orders McDonald's to stop using lie detectors when hiring staff.
Employees were asked whether they or others they knew had union sympathies.
San Francisco: 1973
A worker asks the manager to recognise the union and negotiate a contract.
Immediately staff are given a party, sports clothes, a free meal every day,
enlarged cloak rooms with music. Management runs a press campaign against
the unions, and tries to divide them. The Labour Board steps in, but the
union eventually collapses.
Chief Personnel Officer sends out a circular which reads:
"If you notice during the conversation that the candidate is a trade
union member, bring the interview to a close after a few additional questions
and tell him that he will receive a reply in a few days . . . do not hire
him on any account."
The Labour Inspectorate has already fined McDonald's twice for refusing
to hold union elections. Employees in Madrid decide to request elections.
The 4 convenors of the meeting are sacked and only rehired after the Labour
Inspectorate intervenes. Another 20 employees are transferred to other stores
to remove the majority favouring elections.
But the 'non-conformists' refuse to be converted.
Swedish trade unions have good relations with management and regularly visit
outlets to inform employees of their rights and recruit members. After a
long struggle Dublin workers win union rights.
Sweden and Ireland:
Pickets stand day and night outside Mexico City's first McDonald's opened
in late 1985. After a 3 week struggle the hotel and catering union wins
full recognition with agreements on sick pay, holidays and paternity leave.
But their demands for full-time employment on the minimum daily wage are
The union wins sole negotiating rights, 3 hours a week paid time-off for
union reps, and 90 days paid leave for all employees to attend union education
programmes! McDonald's also agrees to help form a work's library, subsidise
travel, provide transport after 7pm, and to pay half the cost of prescribed
eye glasses. Every 2 months managers are to discuss the functioning of the
corporation as a whole with employees.
Dave Turnbull, TGWU and Service Workers Advisory & Action Project (SWAAP),
talks about the challenge of McDonald's for unions.
"The main problem to building any organised base is the massive staff
turnover which means membership turnover is going to be equally high. You've
also the difficulty that the majority of jobs are part-time. So it's difficult
to make them conscious of their problems and the need to organise.
"There are 2 points about the successes abroad:
- In Spain, Nicaragua and Mexico they've had strong and positive trade
union legislation which they've used in their efforts to organise. In this
country we don't have the same central government legislation to back-up
organisation. Instead we've got anti-trade union legislation and the weakening
of employment rights.
- Elsewhere, as in Mexico, the catering industry has had a strong tradition
of trade union organisation. Whereas in this country only 6-10% of the general
hotel and catering workforce are unionised so there's no tradition of organisation
to back-up efforts in McDonald's. It's difficult for the trade union movement
to decide priorities in an unorganised industry
"The targets of the TGWU Link-Up and Living Wage campaigns are Trust
House Forte and Ladbrokes, the biggest hotel chains with a more permanent
and stable workforce where you can build long-term organising drives. Most
resources are going there rather than to the growing fast food sector. The
idea is that if you achieve trade union recognition in the biggest groups,
the others will follow
'At the moment we're a long way from tackling McDonald's but there are ways.
The campaign demands full-time rights for part-time workers, permanent rights
for temporary workers - are correct ones for companies like McDonald's.
The problem is how you organise people around those demands. how you begin
to get in and recruit members. There'd have to be a well organised campaign:
- "You wouldn't have any result organising from outside with traditional
leaflet campaigns. So we need to do it from inside, targeting one McDonald's
and getting shopstewards and activists into that store. Try to build it
up over 3-6 months and then use it as a base for all the rest.
- "To recruit key workers such as drivers and those who work at the
main depots, in the more traditional way
"Once you've built up members in the target store you can approach
McDonald's for recognition, which they'd obviously turn down. Then you lead
in with a dispute followed by a recruitment campaign in the other stores.
Explain to workers the union's aims and what the dispute is about.
"Demands would depend on the members. There's a velid argument for
part-time jobs becoming full-time. But if workers felt they needed part-time
jobs then we have to make them on the same hourly rates, with the same rights
as full-time jobs.
"You could also link up with community groups. Recently SWAAP ran a
workshop in a school to increase awareness about the role of trade unions.
That's one way to reach the young who go into McDonald's.
"From the Labour Party we'd like to see positive legislation on trade
unions and employment rights. We're also discussing replacing the Wages
Council with a statutory joint industrial council to get rid of the independents
and have direct negotiations between employers and trade unions. There'd
be no limits on what this could cover - so access to trade unions etc, would
be drawn up in national agreements."
The International Union of Food and Allied Workers (IUF), an association
of unions around the world, is co-ordinating a campaign on McDonald's. Recognising
that no transnational corporation (TNC) can be tackled on a national basis
alone, the IUF supports local struggles and exchanges information on McDonald's
operations and their collective agreements with unions in different countries.
As part of a strategy to prevent the corporation breaking a union in one
country it aims to contact McDonald's suppliers in Britain.
Lean profits, fat wages?
Despite the problems there are pockets of unionised resistance in fast food.
Casey Jones workers are members of the NUR; parts of Wimpy's distribution
and transport sector are unionised; and Pizzaland managers have recently
joined the TGWU. In Kingston KFC workers have joined GMB - the largest union
in the industry with a special section, the Hotel and Catering Workers'
Union. Their campaign for Fair Laws and Rights in Employment (FLARE) aims
to step up recruitment and in the words of the General Secretary: "to
put the law on the side of the low paid and the oppressed."
McDonald's has just spent £10 million on the Finchley HQ. A phenomenally
profitahie TNC McDonald's can well afford to employ full-time permanent
workers or pay young people and part-timers equivalent rates.
7. Community Asset or Scourge?
Stop the Barbarians
"The world's best neighbour, " is the message at the heart of
McDonald's relentless PR drive. "The Company believes in giving something
back to the millions of people, the thousands of communities who have helped
make it a success." The untold benefits cover everything from litter
patrols to creating jobs. "You cannot expect to operate in a community,"
they say, "unless you are prepared to contribute to it." In 1985
UK Annual Report noted donations to charities of £130.
McDonald's tries to endear itself to the public and political authorities.
For the opening of new outlets often evokes fierce local indignation and
opposition. Swedish demonstrators threw smokebombs in protest against the
"Americanisation of the economy". In Rome, where McDonald's ventured
only after the laws on part-time work were relaxed, the campaign banner
read: "Stop the Barbarians."
Aquino's murder in 1983 prompted mass demonstrations against the Marcos
regime. McDonald's was one of the foreign companies boycotted for draining
the economy and having "close connections" with high government
officials. Immediately McDonald's placemats propagated that they were good
for the community, detailing their contribution: "to the growth of
a strong ... banking and financial system." They had cause to be worried:
sales had dropped by 10%.
In the UK McDonald's have had a more muted reception. Nevertheless, staking
a claim in the high street presents its own problems. A protracted battle
ensues every time McDonald's applies for planning permission. But they have
perfected the art of municipal politics and rarely lose.
Street Fight in Waltham Forest
In 1986 McDonald's applied to Waltham Forest Council, London, for planning
permission to open two new outlets. One was to convert an old House of Holland
store in Chingford, an affluent residential area and Norman Tebbit's constituency,
The second was to open a drive-thru
in run-down Leytonstone.
In Chingford Norman Tebbit showed his own disfavour and letters flooded
in to the council from over 800 residents, retailers and organisations ranging
from the Green Party and London Transport to the Midland Bank and the Townswomen's
Opposition focussed on hazardous parking, noise and litter, an increase
in loitering and general inconvenience. People felt their appetites were
already well catered for by 11 nearby restaurants, mostly take-aways.
"McDonald's are vigorous campaigners", said an official in the
Borough's Chief Executive office. "They are a smooth machine and anticipate
decisions. They come with standardised plans and use the 1985 Access to
Information Act to badger officers into seeing who's objecting."
As you bite into your burger and fries, you can read how nutritious they
are. The guide is McDonald's reply to the attacks of health campaigns which
link fast food to cholesterol and heart disease. What the guide doesn't
tell you is whether the fats are saturated or unsaturated; that the lettuce
is drowned in chemicals to keep it "fresh". But as Ed Rensi, President
for McDonald's USA said: "It's a good way to sell our story."
Your Good Health!
In the US a $20m campaign has backfired. Three states have threatened to
sue the corporation for "deceptive" advertising. "McDonald's
food is, as a whole, not nutritious", wrote the Texas Attorney General.
"The intent and result of the current campaign is to deceive customers
into believing the opposite. Fast food consumers often choose to go to McDonald's
because it is inexpensive and convenient. They should not be fooled into
eating there because you have told them it is nutritious." McDonald's
dropped the ads. As a leaked internal memo noted: "We can't really
address or defend nutrition."
Before long McDonald's took to the streets distributing the "Chingford
Special Report" - a standardised leaflet for McDonald's countless local
battles. "A treat for child and parents alike", locals are enticed
with the lure of cheap, nutritious food in attractive surroundings from
a company that cares for the environment. "Almost £0.75 million
will be spent on fitting out McDonald's... providing welcome investment
to the town ... GIVE US YOUR SUPPORT. PLEASE SIGN THE PETITION."
The council received a detailed exposition. Should they, in common with
other boroughs, be worried about loss of retail frontage in the high street,
McDonald's argued: "Of the 199 trading restaurants and those currently
under construction, 95% were Class 1 retail premises upon which the Company
has obtained change of use application." At an estimated 8,000 per
week: "More customers per square foot are served in a McDonald's restaurant
than in most conventional shops."
The council turned down both applications. McDonald's will not be appealing
against the Chingford decision. The only other time they went so quietly
was in London's exclusive Hampstead.
The Final Show-down
But McDonald's has fought tooth and nail for the drive-thru in Leytonstone.
No sooner had their application been refused than their PR people were back
on the streets with the Leytonstone Special Report. They collected 7,000
signatures, reportedly shoving the petition under the noses of motorists
at traffic lights whether their registration plates showed Leytonstone or
The Report claimed "road improvements and access have now been agreed
between McDonald's and the London Borough of Waltham Forest to allow the
development to take place". Yet the Council had just refused planning
permission! McDonald's were forced to apologise and withdrew the petition
from the public enquiry.
It was not to McDonald's itself that the Council objected but the free-standing
drive-thru. Out of character with the surrounding Victorian gables, the
council pushed for design changes. McDonald's refused - designed in suburban
Illinois, its freestanders are cloned throughout the world. The council
then wanted them to move the building back several yards to allow more room
for shoppers. McDonald's replied - it's computer designed. The phone to
the US was constantly engaged, and only at the last minute did they concede.
More importantly, the drive-thru did not fit in with the council's plans.
Leytonstone has lost out as shoppers and the retail trade have moved away,
driven out by the street's unbearable traffic congestion and noise. The
council wants to divert traffic away and rejuvenate this area with a pedestrian
centre and new shops - drive-thrus run counter to these plans.
A 1985 government circular reminded planning authorities about their obligations
to presume in favour of development on planning applications. An application
can now only be refused if it will cause "demonstrable harm" to
some particular interest. As one official said, in the past more importance
was given to local plans with long consultation and appropriateness of land
use. "The presumption is," said a London councillor, "if
there's money, go ahead!"
On 8 July 1987 McDonald's were given the green light when the Secretary
of State at the Department of the Environment ruled in their favour. It's
not the first time central government has proved a powerful ally.
When Putney council refused them on the grounds of loss of retail space,
McDonald's appealed successfully to the Department of the Environment who
stated that: "Whilst conflicting with the criteria laid down in the
Borough Plan (McDonald's) would not seriously damage the council's shopping
policy," Time and again, from Staines to Nottingham and Easthourne,
councils have been pressured to concede to McDonald's development plans.
Friend or Foe?
Nearly 40% of the forest cover in Central America has been destroyed. The
land is now pasture for the cattle that supply cheap beef to North America's
fast food industry. Burger King admits to importing beef. But McDonald's,
the largest beef buyer in the world, have categorically denied allegations
that they use Central American beef in the US.
"McDonald's USA and Canada has never purchased imported beef from Central
or South America for use in their hamburgers... Should any organisation
... state or infer that McDonald's is involved in buting beef from the Central
or South American rain forest area, for use in the US ... we will issue
immediate legal proceedings against them."
Surprised at the litigious tone of this letter, Friends of the Earth(FoE)
"It still appears to us that your organisation is unable to prove categorically
that it does not buy beef from Central American sources. As we discussed
this has nothing to do with McDonald's intentions to use domestically produced
beef, but quite simply from an inadequate labelling system. ... (which labels
all beef whether imported or domestically produced as domestic once it has
been passed satisfactory to consume ...) Until the US Department of Agriculture's
labelling methods are changed, all users of beef in the industry will therefore
be liable, if only by implication, to charges that they are involved in
using beef which has been reared on pastures cleared from Central American
McDonald's is an equal opportunities employer bringing jobs to the high
street. However its "knock-on" effects are limited given that,
apart from local dairies or window cleaners, its suppliers are centralised
and often not even in the UK.
Jobs at any Price?
"The council has shown itself to be anxious not merely that people
have jobs but about the quality of those jobs" read the Green Party's
submission to Chingford. "We are concerned about the standards of employment
that this restaurant will bring to local people." Although planning
committees have no power over employment practices, the new Economic Development
Units are tackling issues such as the provision of training. And there are
other avenues local authorities can pursue.
One move is the strict enforcement of existing regulations. Cases have been
brought against McDonald's under the Shops Act in Luton and Guildford. In
Slough the senior Education Welfare Officer took McDonald's to court for
breaking the child employment laws.
"The whole industry gets away with it all over the country, depending
on kids who are shamelessly exploited," she says. "It's profitable
enough for McDonald's to ignore the law. We don't have much time to investigate
or to do anything when we find they're breaking the law. This is just one
of our duties 50 it'S not a priority, We could do much moie about juvenile
employment, however, if they doubled the number of officers. Local authorities
can take action. It's part of their job and it's their duty,"
In recent years progressive councils' economic policies have shifted towards
more direct intervention in production. Councils are developing co-ordinated
strategies for catering and the food industry which tackle the quality of
jobs, services and products available to the public. Initiatives already
taken point the way forward for fast food.
Planning for Fast Food
· Local councils, and their enterprise boards, have begun to invest
in the food sector. Merseyside Enterprise Board, for example, has invested
in El Andino, a Mexican fast food store. There are openings in the market
for stores which guarantee nutritious fast food, union representation and
decent employment conditions. Camden Council provided finance and training
for Applejacks, a cafe employing people with special needs.
- A study of the Merseyside food industry by the Enterprise Board and
the Centre for Local Economic Strategies recommended establishing forums
for local businesses to meet consultants, youth and women's groups, the
Council's education and health departments and trade unions to consider
product development, working conditions, and opportunities for expansion.
· Fast food giants like McDonald's benefit from economies of scale
and control of their own suppliers and transport. The same study proposed
that councils help smaller businesses co-operate over warehousing, transport
- Economic Development Units are promoting the provision of training by
local training bodies and employers to upgrade workers' skills. There are
obvious benefits for fast food workers from courses in catering, nutrition
and diet, technology and food economics.
· Effective intervention depends upon a broad alliance of interest
groups. Councils have supported existing campaigns on food, and developed
their own, which both broeden the public's awareness and extract specific
concessions from employers. ILEA has shown what can be done - they got companies
to reduce the sugar content in baked beans.
These few examples show the potential for intervening in fast food. There
are no easy answers but one thing is sure:
McDonald's has Big Plans for Britain!
Justice on the High Street
Unjust wages and conditions run throughout the multinational fast food chains.
Yet with their meaty profits they can, and should, provide proper jobs to
McDonald's concerns us all - whether we are residents, consumers, workers,
parents or members of trade unions and local councils. And its high profile
makes it as vulnerable as it is profitable. Whilst there is no coordinated
campaign on McDonald's, things are happening which we can all support.
The unions are campaigning for a new set of legal rights to protect young,
part-time and temporary workers. Local authorities are planning for fast
food and intervening accordingly, Consumer groups, such as the London Food
Commission (Promotions) are pressurising the food industry to reduce the
saturated fats, chemical additives and sugar in their products. Other organisations
are calling for an end to low pay in the service sector. The time has come
for justice to return to the high street.
Get in Touch:
The main trade unions working with fast food are:
- GMB (General, Municipal and Boilermakers' and Allied Trades Union -
including the Hotel and Catering Workers'Union), Thorne House, Ruxley Ridge,
Claygate, Surrey KT1O OT1. 0273 62081.
- TGWU (Transport and General Workers' Union), Transport House, Smith
Square, London SW1P 3JB. 01-828 7788.
- USDAW (Union of Shop, Distributive and Allied Workers), Oakley, 188
Wilmslow Road, Fallowfleld, Manchester M14 6LJ. 061-224 2804.
- IUF (International Union of Food and Allied Workers), McDonald's Working
Group, Rampe Du Pont-Rouge 8, CH-1213, Pt Lancy, Geneva, Switzerland. An
association to which national unions affiliate, campaigning on McDonald's.
Advice and Information
- TICL (Transnational Information Centre London). 9 Poland Street, London
WIV 3DG. 01-734 5902. Provides information about transoational corporations
to local authorities, trade unionists and community groups to support campaigns
and extend international support.
- SWAAP (Service Workers Action and Advisory Project), Dave Turnbull,
Room 160, South Bank House, Black Prince Road, London SE1. 01-587 1435.
- LOW PAY UNIT. 9 Upper Berkeley Street, London WIH 8BY 01-262 7278. They
can give information, are monitoring the effects of the Wages Act and want
to hear about your experience. They also have regional offices.
- WAGES COUNCILS. Mr Wood, Clifton House, 83 Euston Road, London. 01-387
2511. They set legally enforcahie minimum wages for workers over 21 in certain
types of work, including fast food and catering.
- LONDON FOOD COMMISSION. Tim Lobstein, 88 Old Street, London EC1V 9AR.
01-253 9513. An independent watch-dog concerned with the production and
consumption of good quality food. Has a project on nutrition and fast food.
- CENTRE FOR LOCAL ECONOMIC STRATEGIES. Heron House, Brazennose Street,
Manchester M2 5HD. 061 824 7036 Supports local authorities and other relevant
organisations developing local economic strategies.
Read all about it
- McDonald's Corporation USA, Annual Reports.
- Low Pay Unit/ GMB, Waiting for Change? Working in Hotel & Catering,
- Labour Research, June 1986.
- SWAAP Unpublished report on fast food companies 1986.
- Gabriel Y Pressure Cooking: An investigation of work in the catering
industry. Food Policy Unit, Manchester Polytechnic
- IUF Directory on Transnational Companies, McDonald's Corporation 1983.
- Liquor Trades Union, Australia, McDonald's.
- Centre for Local Economic Strategies Food is Work 1986.
- Clutterbuck C. and Lang T. More than you can chew Pluto Press 1982.
- GLC The London Industrial Strategy - The Food Industry.
- The Listener 29.5.85; Fortune 12.11.84; Business Week 13.9.86; Retail
Business No 337, March 1986; Popular Foodservice.
- Love, JF McDonald's: Behind the Arches, Bantam Press, 1987.
Many thanks go to all the McDonald's workers and store managers who spoke
to us. Also to John Kabbash, Steve Bell, Warren Garrett and officials at
Waltham Forest, Simon Counsell (FOE), Clare Smith, Richard Beard, Rosaliod
Allen, Nick, Jenny and Dave Turnbull at SWAAP Patrique Dalde and Bob Ramsay
(IUF), Robin Murray,