McDonald's seen overhauling U.S. menu

Bloomberg NewsMay 18, 2013 

CHICAGO -- The Angus burger is going away, and it may not be the only McDonald's dish on the chopping block.

The world's largest restaurant chain has also considered axing Caesar salads, the McSkillet Burrito, the Southern Style Biscuit and steak bagels, according to a franchisee email obtained by Bloomberg News. While the Angus burger contains as many as 820 calories and costs $4, the culling isn't simply about offering healthier fare and cheaper items. It's an effort by McDonald's Corp. to streamline a menu that has expanded by 70 percent to about 145 items since 2007 -- straining kitchen staff, gumming up service and spoiling customers for choice.

"It's gotten to the point where the operation has kind of broken down and that's all a symptom of the complication of the menu," said Richard Adams, a San Diego-based restaurant franchisee consultant and former McDonald's store owner. "They can't make the food fast enough."

In October, some McDonald's franchisees received an email from a regional representative proposing "core menu changes" based on information from customer complaints.

Teams had been formed to address menu size and understand "what's getting in the way of quality and service," according to the e-mail. Seven menu items were identified for potential removal. So far Fruit & Walnut salads, Chicken Selects and Angus burgers have been eliminated.

"We are constantly adding and removing menu items," Danya Proud, a McDonald's spokeswoman, said in an email. "It's not new for McDonald's. We've been doing it

for decades!" She declined to comment on the email.

McDonald's Chief Executive Officer Don Thompson is trying to revive U.S. same-store sales, which dropped 1.2 percent in the first quarter. The picture improved in April, when sales at stores open at least 13 months rose 0.7 percent. McDonald's shares have gained 11 percent in the last 12 months, while the Standard & Poor's 500 Index has jumped 25 percent.

The shares have recently become less valuable to investors. They're trading at a 16 percent premium to the S&P 500 Index on a price-to-earnings basis. They were trading at a 25 percent premium on April 18, the day before the Oak Brook, Ill.- based company reported that first-quarter net income, at $1.27 billion on $6.61 billion in revenue, was little changed from the previous year.

Cutting the menu down to size is a challenge for McDonald's in part because U.S. fast-food chains are engaged in an arms race as they compete to attract diners. Even as McDonald's cuts items, it keeps adding new ones, including egg-white McMuffin sandwiches, three varieties of chicken McWraps and three new Quarter Pounders. Burger King Worldwide Inc. in March started selling turkey and veggie burgers, while Wendy's Co. rolled out flatbread grilled-chicken sandwiches.

The first McDonald's, a barbecue joint with carhop service, opened in 1940. Eight years later, the chain pared its menu to nine items, including burgers, cheeseburgers, soft drinks, milk, coffee, potato chips and pie. Over the years, the menu grew as competition heated up with Burger King and Wendy's. The Filet-O-Fish arrived in 1963, followed by the Big Mac in 1968 and the Egg McMuffin in 1975. Along the way, pizza, spaghetti and the Arch Deluxe burger came and went.

The menu started getting more complex in the late 1990s after then-CEO Jack Greenberg pushed stores to convert to the Made-For-You ordering system, which required McDonald's to make its food fresh instead of cooking it ahead of time. The innovation allowed the company to move beyond traditional burgers and fries.

McDonald's has tacked on about 60 items since 2007 and now sells 145, according to data from menu researcher Datassential in Los Angeles. The increasing complexity has slowed service at a chain that has come to define fast food.

While McDonald's, which has about 14,100 U.S. locations, is trying out a new ordering system and adding double-lane drive-throughs to speed its service, the efforts may not be enough as some of the new items take a long time to make.

McWraps, which come in three flavors including sweet-chili chicken, take about 60 seconds to make, according to Adams, the restaurant franchisee consultant.

"That's a very labor-intensive thing," he said.

Fast-food chains compete fiercely to provide the fastest drive-through service. It takes longer to get through the McDonald's drive-through than it used to, according to a study by QSR Magazine and Insula Research Inc. in Columbus, Ohio.

Bradenton Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service