Has the addition of oatmeal, snack wraps, Angus burgers and the like overstocked McDonald’s menu? Some franchisees believe it has.
In an equity research note this week, Mark Kalinowski, analyst with Janney Montgomery Scott, New York, compiles results from his latest McDonald’s Franchisee Survey. Kalinowski spoke with 28 U.S. franchisees, accounting for a total of 180 restaurants. They report an aggregate sales increase in December of +4.1%, leading Kalinowski to raise his projection of total U.S. McDonald’s sales last month to +3.2%. The company announces sales on Jan. 24, and it has consistently reported same-store sales that are higher than its competitors’.
Franchisees love strong sales, but Kalinowski also asked if they believe menu complexity has become an operations problem. If so, he asked, what would they remove from the menu. Although the sample size is admittedly small, it’s interesting to note that a majority of operators he spoke with said that the McDonald’s menu has become too big, slowing service times and brand momentum.
McCafé drinks were mentioned by a few operators. Said one: “Yes. Too many choices on McCafé, Angus, chicken sandwiches, and too many sizes—beverages, fries, etc.” The McSkillet Burrito was singled out by others as a particularly slow-selling item. Another operator told Kalinowski: “Menu simplicity is a must for smoothies. All wraps are taking too long but I am not sure I would remove them. All slow selling items need to be reconsidered.”
Kalinowski references a Wall Street Journal article that put the number of McDonald’s menu items at 100. I did a quick count that did not include beverages (soft drinks, coffees, shakes, smoothies, etc.) and came up with 83 items, which is higher than for competitors. That includes 32 different burgers, sandwiches and wraps alone. There are nearly two dozen salads for staff to prepare.
McDonald’s isn’t alone in facing menu overload, as the accompanying chart of major QSR burger-chain menus shows. The expansion of breakfast, especially, has increased the complexity of menus. Burger King’s menu now includes two platters, four different biscuit sandwiches, five Croissan’wiches, six Double Crossan’wiches, french toast sticks, Cini-minis and more.
Wendy’s menu count is lower in part because it has no national breakfast menu. That, of course, will change next year if a rollout goes as planned. The difference between Carl’s Jr. and sibling Hardee’s is primarily Hardee’s bigger breakfast menu. Sonic has just a half-dozen core breakfast products, instead putting more menu attention on beverages, which aren’t counted here.
With a number of new McDonald’s menu wrinkles in test recently—including Chicken Flatbreads, Fresh Garden Wraps, Chicken Grande Wrap and the Jalapeño Cheddar McChicken and Cheddar Onion McChicken—operators face the prospect of even more items coming onto the menu. That will be fine with many operators if these are limited-time offers only. One operator told Kalinowski: “We need more promotional items like McRib; put them in, then take them out; maybe two or three times a year.”