“Have it your way” is Burger King’s longtime slogan but McDonald’s is testing build-your-own-burger customization and new premium-price burgers in Southern California, according to a story today by Nancy Luna in the Orange County Register (OCR).
At a recently remodeled restaurant in upscale Laguna Niguel, Calif., south of Los Angeles, McDonald’s waitstaff in black or in white chefs aprons welcome customers at the entrance. The restaurant offers three new high-price specialty burgers as well as the option to choose custom toppings from the list on an iPad menu. The OCR reports that the test is taking place in an Illinois McDonald’s as well.
McDonald’s recently improved its Quarter Pounder line (above). Do its customers want it to move farther upscale with BYO customization? That’s the test.
The BYO and specialty burgers—the SoCal Style, Hot All Over and Grill Thriller—all use the regular Quarter Pounder patty but are priced at $5.79. That takes McDonald’s up to fast-casual pricing: a 7.5 oz. BYO burger at fast-casual chain Smashburger is $5.99.
The OCR says the options include more than 20 toppings and sauces, such as white Cheddar, guacamole, caramelized onions, grilled mushrooms, creamy garlic sauce and applewood-smoke bacon. Other than guacamole, these seem to be foods it has on hand for other menu items (for example, the garlic sauce is used in the Chicken & Bacon McWrap).
Tray liners promote the burgers as “Real. Freshly Grilled. One of a Kind,” the OCR says. Click here to continue reading McDonald’s Trying Build-Your-Own Quarter Pounders
The Dollar Menu & More was just introduced to McDonald’s U.S. stores but the chain already is looking for ways to leverage that budget menu. One possibility is the “Mickey D’s Value Pack” multi-person meals that a McDonald’s spokesperson confirmed are being tested in select Western Division markets.
In Dallas, two options are being offered; both of them combinations of items found on the Dollar Menu & More. The $10 Value Pack includes four regular cheeseburgers, four Hot & Spicy McChicken sandwiches and two medium fries. A $14.99 version bundles 20-piece McNuggets with that same combo of four cheeseburgers, four Hot & Spicy McChickens and two medium fries.
The four-sandwich Value Packs are a step up from the two-person Blitz Box boxed meal McDonald’s offered earlier this year in Kansas City, Mo. The bundled non-Dollar-Menu items it included: two Quarter Pounders with Cheese, two medium fries and a 20-piece serving of Chicken McNuggets for $14.99.
Both Value Packs offer only modest savings (about $1 depending on local pricing) compared with buying the same items a la carte. But any increased value is a plus in the current QSR economy. The benefit to operators is that the bundled meals ensure that high-margin fries are included the meals.
These local deals are McDonald’s first U.S. tests of boxed meals, which it has offered successfully in Europe and Asia. The idea began in Australia in 2010 with the introduction of multi-person Dinner Boxes. These are still available.
Red Robin Gourmet Burgers pushes ahead with its ongoing brand transformation this week with the systemwide introduction of the first of the premium-price burgers the chain has been testing for the past year.
Red Robin is calling these new burgers its Finest line. The first to move onto the menu is the Finest Smoke & Pepper Signature Burger. Like all the premium burgers the chain has tested, this begins with a half-pound Black Angus beef patty that it seasons with alderwood-smoked sea salt. Toppings are black-peppered bacon, extra sharp Cheddar and new house-made Smoke & Pepper ketchup. A buttered, toasted ciabatta bun completes the build.
The chain had told BurgerBusiness.com in June that it was testing Black Angus beef and a variety of house-made sauces and aïolis. It said then that the premium burgers would be menu priced from $12.99 to $14.29. Most burgers on its standard menu are priced from about $9 to $10.50. The new Finest Smoke & Pepper Burger is priced at $13.49 (served with Red Robin’s signature Bottomless Steak Fries).
The inspiration for the Smoke & Pepper burger was Chef Laurent Tourondel’s Smashed Smoke Burger that won the Red Robin-sponsored Best of the Bash Award at this year’s South Beach Wine & Food Festival Burger Bash. Tourondel’s burger was topped with black-peppered bacon, New York State Cheddar, Spanish onion and sweet ketchup.
The Finest line of premium burgers provides a counter to the low-end, $6.99 Tavern Double introduced last year. “What we really have now is with the advent of the finest burger and the first one, which is sneaking this week and launching next week fully, is a range of opportunities, from Tavern Double through our gourmet burgers to our Finest line to work a range of pricing and opportunity,” Red Robin SVP-CMO said at last week’s Q3 earnings call with analysts. “I think it’s going to give us a lot more flexibility, and we have some very distinctive and differentiated propositions to deliver to the guest.”
The “Year of the Bun” continues! Wendy’s this week brings back the Bacon Portabella Melt sandwich it first offered a year ago but this time puts it on a brioche bun for extra flavor and value cachet.
Unlike competitors Burger King and McDonald’s, Wendy’s isn’t shying away from premium-tier burgers. It can do that because it does premium well: the chain announced a strong 3.2% increase in same-store sales for its Q3 ended Sept. 29, 2013. Those sales were driven by the solid success of the Pretzel Bacon Cheeseburger launched in July. However, Wendy’s CEO Emil Brolick said the Flatbread Grilled Chicken limited-time item that followed “did not perform as we expected it to.” McDonald’s heavily marketed introduction of McWrap at that time may have hurt, he conceded. But the Pretzel Pub Chicken premium item just ending its run performed very well, Brolick said.
While maintaining its belief in premium products, Wendy’s is seeing the value of a “barbell” pricing strategy. Brolick said Wendy’s in the past was losing share with what he called the “price/value consumer.” The chain’s Right Price, Right Size menu has helped change that, he said, adding that the “high/low [pricing] strategy is the way to think about the business.”
Brolick said it is “safe to assume” Wendy’s will have new premium items in 2014 (as well as value items). As reported earlier, one of the items could be a Spicy Santa Fe Burger (beef and/or chicken) with pepper-Jack cheese and guacamole on a Cheddar-jalapeňo bun.
Wendy’s has again revamped its unit-design template. The latest version has a shinier, diner-style exterior look, but its most important feature is the price tag: It will cost franchisees just $550,000 to build, compared with the $1.2 million required for the 2011 version. “Plus Ups” or add-ons to the new standard design are available.
Brolick said the new look—which will be the standard for all new and remodeled restaurants—targets “the sweet spot of wow impact,” meaning it focuses on what consumers want most in a restaurant. The design is yielding a 10% to 20% sales boost.
The chain continues its refranchising effort. It intends ultimately to sell 425 company restaurants to franchisees and has sold 118 so far. Systemwide, There are more than 6,500 Wendy’s restaurants.
McDonald’s next week continues its efforts to highlight local products in Europe with the introduction in Italy of a new burger made from local Piedmontese and Chianina beef. According to Italian news agency Ansa, the burger is the result of a partnership with Italian meat supplier Gruppo Cremonini and the Coldiretti association of Italian farmers and ranchers.
The original McItaly in 2010
Coldiretti President Sergio Marini called the partnership an opportunity to introduce young Italians to “the extraordinary quality of the meat of the Italian native breeds that are a wealth of biodiversity, food security and nutritional values, unique and exclusive in our country.” Piedmontese and Chianina are native to central and northern Italy. The new burgers will be available in Italy beginning Nov. 13.
Three years ago, McDonald’s worked with the government of former Prime Minister Silvio Berlusconi to create a “McItaly” burger, made with entirely locally sourced Italian ingredients, including beef (but not Piedmontese and Chianina), Asiago cheese, lettuce and bread. The burger was launched with advertising proclaiming “McDonald’s speaks Italian.” Click here to continue reading McD’s Giving Italians New Local-Beef Burger
BurgerBusiness.com occasionally invites outside voices and opinions if they command respect. Barry Klein, who was a marketing executive at McDonald’s in the 1970s, wrote the essay below for BurgerBusiness.com. He created the Ronald McDonald character and helped craft the classic “You Deserve A Break Today” campaign. Klein also spent five years as a McDonald’s franchisee in New York City before returning to marketing as a senior VP at Wells Rich Greene in Los Angeles. There he worked on campaigns for Jack in the box and others. He currently works in Chicago as a marketing consultant. His opinions are his own. Reactions can be left here or sent to Barry at [email protected]
By Barry Klein
It was gratifying to be part of the early growth of the McDonald’s brand. Over the years, most burger-business career practitioners have been astounded by this icon’s ability to serve more and more people around the world tasty, fulfilling food that is affordable, convenient, and even preferred in many cases. Along the way, there have been many successes and a few bumps in the road. But the successes have far outweighed the slips, which is why the company has become the gold standard of the restaurant industry.
Everyone knows that most business is cyclical, with periods of high and low results, especially in retail categories, where beating last year often depends on how good business was then. When a company has a long string of increased sales and profits, that company is criticized if the results don’t continue upward. McDonald’s is currently in the position of recording relatively flat comparable store volume growth, after an unusually long period of year-to-year increases. Nearly all the reports on its strategies are negative, from Wall Street, franchisees and the press.
But let’s look at a few of the critical darts being thrown now at McDonald’s:
• Too many limited time offers are bogging down preparation times and slowing service. Do customers care? Fast casual has proven that people will wait a bit longer to get tastes they want. McDonald’s is addressing preparation problems by modifying kitchen layout and alignment.
• Store profitability is eroding. If there are more transactions from new tastes, it usually means more dollars on the bottom line. Whether the new product brought more customers should have been learned in test markets.
• Dollar Menu makes customers avoid higher-priced items. Is anyone willing to eliminate the Dollar Menu (now Dollar Menu & More)? Again, customer count should increase if more people come to try the new item. Click here to continue reading Opinion: McDonald’s Deserves a Break