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Online Extra: McDonald's: The Rise and Stall


1948 Brothers Richard and Maurice McDonald open the first restaurant in San Bernadino, Calif. It's a single store that sells hamburgers and fries. It also does a strong business in milk shakes.

1955 Ray A.Kroc, 52, opens his first McDonald's in Des Plaines, Ill. The first day's take: $366.12. Kroc, a distributor of milk shake mixers, figures he can sell a bundle of them if he franchises the McDonalds' business and install his mixers in the new stores. Six years later Kroc buys out the McDonald brothers for $2.7 million.

1956 Major funding begins for the interstate highway system. Over the following decades, hundreds of McDonald's will sprout alongside the new roads, offering fast food to America's mobile millions.

1960 An early indication of the competition to come: Domino's takes its first telephone order to deliver a pizza.

1962 The talking chihuahua is years in the future, but Taco Bell's first outlet opens in Downey, Calif. Two years later, the chain begins franchising units.

1963 Ronald McDonald makes his debut as corporate spokesclown. The first Ronald: future NBC-TV weatherman Willard Scott. During the year, the company also sells its 1 billionth burger.

1965 McDonald's stock goes public at $22.50 a share. It will split 12 times in the next 35 years.

1967 McDonald's goes international. The first restaurant outside the U.S. opens in Richmond, British Columbia. Today there are 31,108 McDonald's in 118 countries.

1968 The Big Mac, the first extension of McDonald's basic burger, makes its debut. It's an immediate hit.

1972 Fresh is out, at least with potatoes. McDonald's switches to the frozen variety for its french fries.

1974 Fred L. Turner succeeds Kroc as CEO. In the midst of a recession, the minimum wage rises to $2 per hour--a big cost increase for McDonald's, which is built around a model of young, low-wage workers.

1975 The first drive-through window is opened in Sierra Vista, Ariz. McDonald's, a marketing juggernaut on its way to becoming one of the world's most valuable brands, unveils a new advertising jingle: "Two all beef patties, special sauce, lettuce, cheese, pickles, onions, on a sesame seed bun."

1979 With the rise of women in the workplace, fewer of them are making dinner at home. McDonald's responds by introducing Happy Meals. A burger, some fries, a soda, and a toy give working moms a break.

1983 Chrysler unveils the first minivan, giving parents another wasy to get to McDonald's--and a roomier place to eat after they leave with the food.

1987 Michael R. Quinlan become chief executive.

1991 To capitalize on the public's desire for healthier foods, McDonald's introduces the low-fat McLean Deluxe burger. It flops and is withdrawn from the market. Over the next few years, the chain will stumble several times trying to spruce up its menu.

1992 The company sells its 90 billionth burger--and stops counting.

1993 McDonald's opens its first outlet in a Wal-Mart, which goes on to become the largest company in the world.

1994 Sued by a woman who burns herself after spilling hot coffee, McDonald's is ordered to pay $2.9 million. The suit is ultimately settled for a smaller, undisclosed amount.

1996 To attract more adult customers, the company launches its Arch Deluxe, a "grownup" burger with an idiosyncratic taste. Like the low-fat burger, it falls flat. Worse, a marketing campaign featuring Ronald in more "adult" settings--shooting pool and cavorting with the Radio City dancers--proves embarrassing.

1997 McDonald's launches Campaign 55, which cuts the cost of a Big Mac to $0.55. It is a response to discounting by Burger King and Taco Bell. The move, which prefigures similar price wars in 2002, is widely considered a failure.

1998 Jack M. Greenberg becomes McDonald's fourth chief executive. A 16-year company veteran, he vows to spruce up the restaurants and their menu.

1999 For the first time, sales from international operations outstrip domestic revenues. In search of other concepts, the company adds Aroma Cafe, Chipotle, Donatos, and, later, Boston Market.

2000 McDonald's sales in the U.S. peak at an average of $1.6 million annually per restaurant, a figure that has not changed since. It is, however, still more than at any other fast-food chain.

2001 Subway surpasses McDonald's as the fast-food chain with the most U.S. outlets. At the end of the year it had 13,247 stores, 148 more than McDonald's.

2002 In November, teenagers sue McDonald's, alleging its fatty and unhealthful foods caused their obesity. The case is dismissed three months later.

2002 McDonald's posts its first-ever quarterly loss, of $343.8 million. Today the stock trades around $13.50, down 40% from five years ago.

2003 James R. Cantalupo returns to McDonald's in January as CEO. He immediately pulls back from the company's 10-15% forecast for per-share earnings growth.


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