McDonalds South Africa CEO Greg Solomon has stepped down after 29 years with the company. He is to leave in August after more than 15 years at the helm. However, sources say Solomon was pushed out amid allegations of non-performance and lack of transformation, which the company denies. Daniel Padiachy, chief marketing officer at McDonalds, said this was a mutual agreement between the company and Solomon.
“After 29 wonderful years with McDonald’s South Africa, including 15 years as CEO, Greg Solomon and the company have mutually agreed that now is the right time for him to step down.”
However, according to sources, Solomon was forced to step down due to poor performance and a decline in market share.
Globally, McDonald’s has felt the effects of high inflation and cash-strapped consumers opting for having meals at home.
Locally, insiders have attributed the company’s 2% decline in market share between September 2023 and September 2024 to Solomon’s “lack of vision and innovation”, which contributed to him being booted out.
The company has been experiencing sluggish growth, ballooning operating expenses and capital expenditure costs as well as a market share loss to competitors including KFC, Debonair’s Pizza and Steers, according to sources close to the company.
McDonald’s reportedly was the fourth largest fast food franchise in the country in 2023 after KFC, Chicken Licken and Debonairs.
Sources claim that under Solomon’s leadership ebitda (earnings before interest, taxes, depreciation and amortisation) has declined. “McDonald’s has been hit by profit decline, due to a continued decrease in sales figures,” the sources said.
McDonald’s has been found wanting in one of SA’s crucial areas aimed at redressing the racial past.
— McDonald’s source
Padiachy dismissed the allegations saying that Solomon guided the company through its most successful milestones and its greatest challenges.
“Over the past 15 years as CEO, he has spearheaded the addition of 230 new restaurants resulting in a total portfolio of over 400 restaurants. Under his leadership, the brand has grown significantly, becoming stronger, more resilient, and deeply rooted in our community.”
McDonald’s opened its first restaurant in South Africa in 1995 and has expanded its footprint to more than 400 franchises across the country.
Solomon joined the company in 1996 as a project manager in the construction department. He was appointed MD of the company in January 2009, working his way to the company’s top position by June 2009.
Another major issue raised by the sources was Solomon’s inability to effect transformation within the company.
While McDonald’s South Africa has prided itself on having championed transformation in recent years — with a focus on “sustainability, technology and customer service, the SA franchise has under Solomon’s leadership, lagged in several areas – especially transformation”, said the source.
”McDonald’s has been found wanting in one of SA’s crucial areas aimed at redressing the racial past. It’s actually time for a way forward, it’s time for new leadership in the company and that is someone of colour. It’s that season.”
The sources said it was time for McDonald’s to transform both the supply chain and the corporate level by appointing capable previously disadvantaged professionals to turn the business around.
“Sourcing of agricultural commodities like beef and coffee, shows lack of critical investment by management in its supply chain systems and slow innovation.”
Reluctance by McDonald’s to transform should be a matter of great concern to all South Africans, the source said. New leadership could be just what is needed to restore the popular brand’s fortunes.
While the company has not spoken of its succession plan, it said it was time for new leadership at McDonald’s and Solomon would help ensure that the transition was smooth over the coming months.
Padiachy said while Solomon was vacating his position as CEO, he would remain a part of the company as a board member.
“His presence during the next six months as the CEO of McDonald’s South Africa will help facilitate a seamless transition for the incoming CEO, our employees, franchisees, our crew, and customers.”
The source told Business Times that this was an unnecessary move, as Solomon staying on the board would further destroy the company’s systems.
“The more he stays the more the mess. Now we need corrective measures, we need to rebuild.”
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