During a "Bizarro World" call on Friday McDonald's management spent the morning
trying to convince investors they could succeed in the pricey premium sandwich arena.
And in the afternoon OPNAD sent an E-mail to McDonald's Operators stating:
"It's important to note that the Dollar Menu & More Value Platform is not going away"
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4 comments:
more and more o/os are moving away from dollar menu, it will soon be the $2 and more menu. with all the changes to the menu customers hardly notice when the value menu changes.
In Australia the Dollar Menu equivalent (Loose Change Menu) only makes regular menu prices look extremely expensive. Customers believe the cheap price is normal and everything else is a rip off. Why pay $2.50 for an Apple Pie when it was $1 at one time?
McDonald’s performance for all of 2104 “fell short of our expectations,” President and CEO Don Thompson told analysts. Global comparable sales were down 1% for the full year and off 0.9% for Q4. U.S. comp sales were negative for the fifth consecutive quarter, dipping 1.7% in Q4. Europe comps were down 1.1%; Asia/Pacific/Middle East/Africa comps fell 4.8%.
Thompson said McDonald’s is responding to the declining sales “with a sense of urgency.” What has the company done so urgently? “We redefined menu choice and personalization with the introduction of the Create Your Taste platform in Australia and the U.S.,” Thompson said. “Beyond our existing menu we are asserting McDonald’s burger leadership by offering greater customization and choice. "
During the Q&A session Andres responded to a question about the Create Your Taste platform this way: “Relative to Create Your Taste, please keep this in mind: We have been modeling out looking at Create Your Taste, Build Your Burger now for over THREE YEARS ” His comment was intended to emphasize the company’s long-term commitment to the customization approach, but keep this in mind, too: After three years the platform was being tried in a handful of Southern California units at the end of 2014. Now it is being expanded to 30 stores and the company has said it hopes to have it in 2,000 of its 14,000 U.S. by the end of 2015 (BIG MISTAKE).
McDonald’s is trying to remedy deep near-term problems with long-term solutions. Can that approach be effective? The company says it hopes to have Create Your Taste kiosks in all 900+ Australian units by the end of 2015. That’s great but in what shape will U.S. same-store sales be then?
Keep in mind, too, that there’s no real menu innovation with Create Your Taste, it simply uses technology to allow customers to choose toppings for their burgers. It’s part of the “digital engagement” that McDonald’s believes will modernize its customer experience and reverse its sales slide. But what if customers don’t like or wants McDonald’s food? Ah, that’s a different problem.
What significant, successful menu additions has McDonald’s made since it introduced the Bacon Clubhouse burger in March 2014? The $2 Jalapeňo Double maybe? Don’t tell me Go-Gurt and clementines in Happy Meals. Yogurt and fruit won’t save this brand. It tested an Original Cheddar Melt and guacamole-topped burgers but didn’t roll out either nationally.
Thompson insists that “changes we announced last year to create a flatter, more nimble organization have opened the door for decisions to be made closer to the customer,” including menu decisions. So are there menu winners just waiting to be added by, say,a co-op? Maybe so. But if so, McDonald’s might want to get them out there soon. It’s urgent.
Create your taste will make our regular menu look even worse. Just focus on digital, trim the menu another 25%, maintain value(this who we are folks), and run profitable stores. Glory days are over with so much competition. Stay focused on what WE do. Drive Thru, fast, and cheap, and of course, Brand MCD. There will always be Consumer demand for these, just not like before. There is hope. Tame the Beast!
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