Don’t get me wrong, it’s not like the global franchise chain is in danger of closing up shop, or permanently shutting off its fryers--it’s just that McDonald’s hasn’t seen the type of growth lately that it's seen in the recent past, and executives are starting to fret.
McDonald’s just announced it recorded its lowest sales growth in nine years in the third quarter, and many feel it’s just not the automatic go-to restaurant that it used to be when one wants cheap eats.
There was a time when McDonald’s was pretty untouchable when it came to owning a bulk of the fast-food market, and besides having just a few other chains like Burger King nipping at its heels, the golden arches pretty much stood out front as the first or second option when consumers thought of getting a fast and cheap meal they didn’t have to think about.
McDonald’s has also been a last resort when you can’t figure out what to eat for lunch. It’s been a restaurant of default when you’ve exhausted all of your lunch timepossibilities, and you just can’t think of anything else to eat that’s fast and nearby.
Fast casual
But several factors have made it hard for the burger chain to maintain its dominance. Fast casual restaurants have taken away a portion of business for McDonald's when consumers want an inexpensive meal, but want a healthier menu and a nicer place to dine.
And other fast-food restaurants have taken some of McDonald’s ideas, like adding a dollar menu, frequently changing food items and using celebrity endorsements--which have made Mickey D less dominant in the mind of consumers.
Many believe there are so many other fast-food options that provide more or less the same type of meal and service--and sometimes a lot better--why should they go to McDonald’s?
Cheddar Bacon Onion
For some reason McDonald’s is banking on the release of its new Cheddar Bacon Onion sandwich, which comes in both chicken and beef to help grow sales in the fourth quarter.
The new sandwich is a part of the restaurant’s growing “premium menu,” which is supposed to offset cheaper food options like the dollar menu, which some experts believe hurt McDonald’s, because more and more people are sticking with the lower-priced selections which turn over very little profit.
“We’re balancing our value messaging with premium menu news, including this month’s introduction of the Cheddar Bacon Onion Sandwich, (CBO) which is made with hickory-smoked bacon, white cheddar cheese, caramelized grilled onions and creamy mustard sauce on top of a grilled or crispy chicken patty, or our Angus beef patty,” said Don Thompson, McDonald’s CEO in a published statement.
“The CBO as we like to call it was inspired by a similar entry in Europe. This is the first time we’ve offered one sandwich with a choice of chicken or beef in the U.S. and we’ve seen that both have a high rate of extra value mill conversion and average check increase in our test markets. And in December, we’ll bring back the popular mackerel sandwich nationally. Local markets also continue to focus on beverages in an effort to generate additional consumer excitement,” he said, speaking Marketese, an odd variant of English found mainly in marketing departments.
Cheap cream cheese
If you haven’t seen the CBO yet, it doesn’t appear to be anything special, and besides the white cheddar cheese that looks more like a cheap cream cheese you would put on a bagel, it pretty much mirrors any other sandwich the restaurant offers.
But that’s kind of what McDonald’s does. Instead of creating a completely new sandwich with different flavors, bread and seasonings--it just adds a couple of new toppings to the sandwich, rolls out a huge ad campaign and hopes consumers will get excited.
In many ways, McDonald's is an advertising company that cranks out food as an after-thought.
One could easily say this age-old approach is what stunted McDonald’s growth in the first place. And if the restaurant doesn’t take huge steps to change some of its food options, its growth will continue to stall experts say.
Also, because the franchise chain has counted so much on its dollar menu to drive in consumer traffic, it has ignored the bigger portion of consumers who are willing to spend a little more for better quality and a wider menu variety.
A McDonald’s restaurant owner explained why his location is suffering low sales growth.
“Commodity increases along with construction project upgrades are draining whatever cash flow we might bring in,” he said in a published interview with a news publication.
“The Dollar Menu has limited our ability to cover these costs by raising the rest of menu prices,” he added. “This has created a huge gap between high and low-end, driving more consumers down to supposed Extra Value Menu items which have no useful upside profit potential.”
“Next year projected service cost increases are going to be a backbreaker. Just increasing transaction counts is not going to work if they are unprofitable ones. We have created a scenario of working harder for less. There needs to be a window of time to just make profits without giving them all back."
It’s doubtful the CBO will help McDonald’s that much with sales growth or trick consumers into believing that the company is really making huge efforts to change and provide better menu options.
Better service
Maybe what the restaurant should be doing is improving its customer service and doing a better job of making sure its staff and managers provide a high level of treatment and service.
Just ask Shirley of Washington State, who recently got both lousy food and service from a local McDonald's.
“I ordered a Southwestern Chicken Sandwich at McDonald’s, Belfair Wash.,” she wrote in a ConsumerAffairs posting. “I paid $4.12 for a bun, a piece of chicken and two thin slices of pickle. When a sandwich is advertised with all the condiments, and fresh and yummy, you should expect that. I complained and was offered to purchase some condiments.”
“That same morning, going through the drive-thru, I got two sandwiches that were so hard from sitting under the warmer that I fed them to my dog. And what about that pink slime? How long have we been eating pink slime without our knowledge?” she asked.
So it seems before McDonald’s can reclaim some if its past glory, it should start out small by providing better menu items and a consistent level of good customer service. That’s the trick to better sales. Not slathering new fixings on the same old sandwich.
