How McDonald's conquered France.

What to eat. What not to eat.
June 25 2009 1:43 PM

How McDonald's Conquered France

The fast-food chain's most surprising success.

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The principal architect (or culprit, depending on your point of view) was Denis Hennequin, a forty-nine-year-old Parisian. He had joined McDonald's in 1984, straight out of law school. At the time, McDonald's was relaunching itself in France; an effort in the 1970s to establish a presence there had failed because of the company's dissatisfaction with its French franchisee. After stints as an assistant store manager, a training and recruiting consultant, and the Paris regional director, Hennequin was named president and managing director of McDonald's France in 1996. In the eight years that followed, he steered the company through the Bové controversy and into a period of robust growth and expansion. It was a job so well done that in 2004, Hennequin was promoted to executive vice president of McDonald's Europe, and just a year later he was put in charge of European operations, overseeing more than six thousand restaurants in forty countries and a quarter-million employees. Having done the seemingly impossible and made McDonald's safe for France, he was now thought to be in line to take over the entire Chicago-based company. A Frenchman running McDonald's—it would be a hard thought to swallow on either side of the Atlantic.

Within the organization, it was widely agreed that Hennequin had exhibited audacious leadership in France, notably in his handling of the Bové crisis. Rather than doing the prudent, corporate-minded thing and seeking some form of conciliation with Bové, Hennequin had decided to meet provocation with provocation. In 2001, McDonald's France had launched a promotional campaign using Astérix, the beloved French cartoon character whose thick handlebar mustache was the inspiration for Bové's facial broom. That same year, Hennequin rolled another, bigger grenade under Bové's tractor by opening the McDonald's booth at the Salon de l'Agriculture. There was deep anxiety among Hennequin's colleagues about the reception that awaited them there. "Everyone said, 'They are going to kill us,' " recalled Eric Gravier, a vice president of McDonald's France and a longtime employee. The fears were so great, he said, that they had all their posters made in triplicate because they expected the booth to be pelted with dung. But Hennequin wouldn't be deterred: McDonald's France was sourcing 75 percent of its ingredients domestically, and he felt it was imperative from a PR standpoint to force French farmers, hypocritically applauding Bové, to publicly acknowledge the large volume of business that they were doing with McDo. While the gambit was undeniably bold, Hennequin understood that he was operating from a position of strength, and not only in regard to the farmers. The French public applauded Bové, too, but in the places that mattered most, the stomach and the wallet, it applauded McDonald's more.

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The wallet was no minor consideration. McDonald's appealed to budget-conscious students, of course, but with France's high unemployment and sluggish economy, it attracted people of all ages. Pensioners, for instance, were among the chain's most loyal clients. The food at McDonald's was cheap, and it was made cheaper still because its restaurants were officially designated as takeout joints. The value-added tax on meals at such establishments was just 5.5 percent, versus the 19.6 percent levied at "gastronomic" restaurants. This gave McDonald's an even greater competitive advantage over brasseries, bistros, and cafés. It was odd that French politicians, supposedly committed to keeping globalization at bay and defending France's culinary patrimony, would extend such favorable tax treatment to an American hamburger chain, and the different rates were a source of endless consternation to chefs, restaurant owners, and other purveyors of French cuisine. As André Daguin, a retired two-star chef and now the head of the French Hotel and Restaurant Association, put it, "Either our government wants us to be the country with the best restaurants, or it doesn't."

What especially cheesed off Daguin and other chefs was that McDonald's was being taxed as a carryout establishment even though the overwhelming majority of its customers actually chose to dine chez McDo. French diners tended to treat McDonald's as if it were no different than the bistro around the corner: They came, they ate, and they lingered. As Gravier artfully put it, "The French population uses McDonald's in a very French way; it is fast food, but not that fast." The data the company collected bore this out. Americans visited McDonald's more often than the French, at all hours of the day, frequently alone, and opted for takeout 70 percent of the time. The French spent more money per visit, came in groups more often than Americans, and did 70 percent of their eating during regular lunch and dinner hours. "We have a food culture in France; eating is not a feeding moment, it is a social moment," Gravier said.

And the company was very adept at catering to French proclivities, a point brought home to me on a visit to a McDonald's on the Champs-Élysées in June 2007. I was part of a group of journalists being given a guided tour by Jean-Pierre Petit, who had succeeded Hennequin as the chief executive of McDonald's France. We had come to this particular McDonald's because Petit wanted to show us the newest addition to the company's product line in France: McCafé, a stand-alone espresso bar offering lattes, macchiatos, and the like, along with fruit tarts, macarons, and other classic French sweets. The company was planning to open McCafés all over France, and the Champs-Élysées location was home to one of the first. Some of the other journalists eagerly ordered espresso drinks and pastries, but I wouldn't be so easily gulled—this was still McDonald's. Petit began making the rounds with a plate of macarons and insisted I try one. I took a pistachio. Not bad, I thought, but no Ladurée. As if reading my mind, Petit immediately chimed in, "We get the macarons from Holder, the company that owns Ladurée." Touché.

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