McDonald’s May Be About to Supersize its All-Day Breakfast Menu

Provided by The Street

McDonald’s successful all-day breakfast menu may be about to become supersized.

McDonald’s is currently testing an expanded all-day breakfast menu at 72 restaurants in the greater Tulsa area, a McDonald’s spokeswoman toldTheStreet. The new menu called “All Day Breakfast: Bigger Menu” features McGriddles, McMuffins, biscuits, pancakes and other breakfast items.

In addition, 84 restaurants in and around Greensboro, Winston-Salem, and High Point, North Carolina will also soon start testing the expanded breakfast menu.

When McDonald’s originally launched all-day breakfast back in October, it only consisted of Egg McMuffins and pancakes as the fast food giant sought to ease franchisees into handling the new menu.McDonald’s CFO Kevin Ozan said at an investor conference on Wednesday that some items would have to be pulled from the menu to accommodate more all-day breakfast items. But the McDonald’s spokesman did not disclose what items, if any, have been pulled from the menu in its test markets.

“We’re still in a testing phase, gathering feedback from the restaurants,” said the spokeswoman.

So far, the all-day breakfast platform has energized McDonald’s once sagging sales. The Golden Arches reported that fourth-quarter same-store sales in the U.S. surged 5.7%, the second consecutive quarterly increase. It was the best performance by McDonald’s since it reported an 8.9% same-store sales gain in the U.S. in the first quarter of 2012.

The expansion of the breakfast menu to include more items, potentially nationwide this year, may add a further jolt to sales.

“People are re-trying McDonald’s, and it’s adding a layer of sales to some meals,” Ozan said at the investor presentation. Ozan pointed out that people are adding Egg McMuffins to their lunch orders, which is boosting the average check value. Moreover, the availability of breakfast around the clock has led to people trading up from cheaper fare on the menu, according to Ozan.

Written by Brian Sozzi of The Street

(Source: The Street)

McDonald’s tests Chicken McGriddle in Ohio: Report

Provided by CNBC

McDonald’s (MCD) is reportedly testing the Chicken McGriddle, a chicken-and-pancake breakfast sandwich, in Ohio.

While the Chicken McGriddle has been offered as part of McDonald’s unofficial secret menu, Columbus Business First reported that the fast food giant is testing the item in 11 restaurants in central Ohio.

The sandwich is essentially a McChicken with maple-flavored pancakes in place of the normal buns, the publication said. The item requires testing locations to add chicken to its breakfast hours, according to Columbus Business First.

The report said the Chicken McGriddle will be available until March 27. The testing locations will experiment with two price points: $1.49 and $2, according to Columbus Business First.

The publication also reported the Chicken McGriddle test will not be supported with advertising.

McDonald’s did not immediately respond to a request for comment from CNBC.

Written by Christine Wang of CNBC

(Source: MSN)

McDonald’s Ramps Up Marketing of All-Day Breakfast

After posting its strongest quarter in nearly four years following the launch of all-day breakfast, McDonald’s has decided to focus its marketing might in the near term on promoting Egg McMuffins, hotcakes and other breakfast items in hopes of building a winning streak.

The company tells USA TODAY it has bought a 30-

After posting its strongest quarter in nearly four years following the launch of all-day breakfast, McDonald’s has decided to focus its marketing might in the near term on promoting Egg McMuffins, hotcakes and other breakfast items in hopes of building a winning streak.

The company tells USA TODAY it has bought a 30-second spot just before kickoff of Sunday’s Super Bowl to air a new advertisement called “Good Morning,” promoting the all-day breakfast menu.

The ad, which plays off the  popular children’s book Good Night Moon, shows young women laughing over breakfast after a night at the bars, a pregnant woman eating hotcakes in the evening as her partner puzzles over assembling a crib, and a young couple sharing a yogurt parfait on the roof of an iconic Los Angeles hotel before sunrise.

Deborah Wahl, the company’s chief marketing officer, points to demographics that show that all-day breakfast reflects a reality that traditional breakfast hours are increasingly out of sync with a wide swath of American workers.  About 15 million Americans work full time on an evening shift, night shift, rotating shifts or other employer arranged irregular schedules, according to the Bureau of Labor Statistics.

“From customers overall, there’s an increasing trend toward flexibility in terms of their schedule and what they want to eat and when they want to eat breakfast,” Wahl said in an interview. “We’re seeing that trend grow especially with a younger audience.”

McDonald’s says they will pay homage, while promoting their all-day breakfast, to those odd hour workers by delivering free breakfast on Friday to some 2,100 television meteorologists and weather reporters — careers that come with unusual work and eating schedules.

The company also plans a push of the breakfast anytime concept by giving away breakfast items from a food truck they call “McRig” this month to after-party revelers at the GRAMMY awards in Los Angeles and the Daytona 500.

The company also began testing the sale of McGriddles — a breakfast sandwich that features eggs, cheese and meat served between two sweetened pancakes — beyond traditional breakfast hours in the Tulsa market earlier this week.

McDonald’s had kept the popular item off the all-day breakfast menu when it was launched in October because of concerns that operators would not have enough grill space to cook breakfast and lunch items if the McGriddle was included. The test underscores that the company is looking to see how far it can push all-day breakfast and each restaurant’s operational capabilities.

CEO Steve Easterbrook counted the launch of all-day breakfast as one of several factors that increased sales by 5.7% at stores open at least a year for the quarter that ended on Dec. 31. Mild weather in much of the country, price increases and a renewed focus on efficiency — such as speeding up drive-thru times — was also credited with helping improve sales.

But some analysts say it may be too early to properly judge the long-term impact all-day breakfast will have on turnaround efforts at the nation’s biggest fast food chain, which broke out of a seven quarter losing streak at U.S. stores in October.

McDonald’s says that all-day breakfast has provided boosts to sale late in the afternoon and during dinner. But the most significant lift to sales at restaurants comes between 11 a.m. and 12 p.m., which may suggest that the breakfast push might be gaining traction with late risers but not necessarily changing customer behavior.

Still, McDonald’s executives in Oak Brook, Ill. express confidence that they have a winner with the launch of a limited breakfast menu throughout store hours. Restaurant operators, however, have offered mixed response to all-day breakfast, according to a survey conducted last month by Mark Kalinowski, an industry analyst for Nomura.

Some operators told Kalinowski that all-day breakfast has raised McDonald’s profile and brought back customers who had become tired of the Golden Arches. But some franchisees also complained in the survey that the breakfast push has put stress on workers and led to slower service at restaurants.

“Killing service and causing chaos in the kitchens during the non-breakfast times,” one franchisee said. “It has also caused management turnover, and crew turnover out of frustration. Employee morale is down because of it.”

Easterbrook, who was tapped last year to lead the company, has vowed to simplify McDonald’s menu.

One frustration for franchisees is that the push for all-day breakfast, which has added complexity to restaurant operations, hasn’t been coordinated with commensurate cuts to the menu, said Richard Adams, a former McDonald’s franchisee and founder of the Franchise Equity Group.

Adams suggested that the company cut the menu by 20% in some markets.

“The original concept of McDonald’s was a very limited menu and very fast service,” Adams noted. “Over the last 20 years, McDonald’s decided it had to be all things to all people and the menu has just grown and grown and grown.”

Written by Aamer Madhani of USA Today

(Source: USA Today)

 

McDonald’s Tests Expanded All-Day Breakfast with McGriddle

 
AP Photo/Candice Choi

Basking in the fanfare over its all-day breakfast menu, McDonald’s is pushing its operational limits by testing the addition of another morning favorite to the lineup: the McGriddle.

The world’s biggest burger chain plans to start offering an expanded all-day breakfast menu that includes McGriddle sandwiches in 72 restaurants in Tulsa, Okla., starting Feb. 1. The test comes after customers complained about the absence of the sandwich when McDonald’s launched a limited all-day breakfast menu in October.

McDonald’s expects the test to last for two to three months before deciding how to proceed.

The test come as McDonald’s rides high from its biggest quarterly U.S. salesjump in nearly four years. The Oak Brook, Illinois company said this week that sales rose 5.7 percent in the last three months of year, boosted by all-day breakfast menu and unseasonably warm weather.

Now McDonald’s restaurants in Tulsa will try adding McGriddle sandwiches, as well as breakfast sandwiches made with biscuits. Currently, restaurants offer breakfast sandwiches made with either biscuits or English muffins, depending on regional preferences. About 80 percent offer “McMuffin” sandwiches, with some areas in the south offering biscuits.

The addition of McGriddles and biscuits in the afternoon could prove to be too much of a strain, especially at a time when McDonald’s has said it’s trying to simplify operations to improve order accuracy and speed.

The syrupy pancake buns for McGriddles and biscuits would need to be warmed up in ovens, which are also used to heat up apple pies, cookies and mozzarella sticks during lunch hours, said LeAnn Richards, a McDonald’s franchisee who led a task force on all-day breakfast. McGriddles and biscuit sandwiches are also made with a frozen egg patty, instead of the cracked egg used in McMuffins.

That means franchisees — who already had to buy new equipment to offer all-day breakfast — would need to further juggle grill and oven space for an expanded menu.

“It’s too premature to talk about next steps,” said Deborah Wahl, chief marketing officer for McDonald’s U.S.

McDonald’s says franchisees in Kansas City also started offering a Sausage McGriddle last month in response to demand. But those restaurants aren’t offering the sandwich with eggs, or biscuit sandwiches.

Despite McDonald’s recent sales jump, it’s still not clear exactly how all-day breakfast is benefiting the chain and whether the effects will last. The company did not say how much of the increase was from an uptick in customer visits, versus factors likes price hikes or people adding extras onto their orders.

Either way, McDonald’s turnaround push is far from over. The company’s U.S. customer visits fell 3 percent last year, following a 4.1 percent drop in 2014.

Written by Candice Choi of Associated Press

(Source: MSN)

McDonald’s is Testing Table Service

  
Scott Olson/Getty Images

Place your order, take a seat. The food will be brought right to you.

McDonald’s is trying out a new service option at 600 of its restaurants in southern California. The system starts as usual: Order at the counter. But then comes the difference: Employees serve customers at their seats.

The tweaked service approach is just one of the many experiments the fast food chain has undertaken in recent months to revamp sales and to compete with higher-end burger upstarts like Five Guys and Shake Shack SHAK.

McDonald’s is also testing a new menu in those same stores, according to the L.A. Business Journal. Its “TasteCrafted” menu pairs beef patties and grilled or buttermilk chicken cutlets with a variety of bun options, including artisan, potato, or sesame seed.

Other recent moves by the Golden Arches include a planned transition to cage-free eggs, the adoption of all-day breakfast, and new menu items, such as a premium milkshake and even a limited-run Chicken McNugget tie-in featuring Japanese pop stars.

Clay Paschen III, president of McDonald’s Operators’ Association of Southern California, told the L.A. Business Journal that the changes reflect the company’s response to changing consumer tastes. There’s no telling yet when or whether these experiments will spread to other locations.

Written by Robert Hackett of Fortune

(Source: Fortune)

McDonald’s Knows You’re Sick of Screw-Ups at the Drive-Thru

  
Wilfredo Lee/AP

 

When you’re cruising the drive-thru, what matters more: How quickly you get your Big Mac or whether they remembered to hold the pickles?

McDonald’s Corp. is betting on the latter. In its latest comeback maneuver, the world’s largest restaurant chain is switching up the outdoor ordering process to make it more personal, and hopefully more accurate. The new method — it’s called “ask, ask, tell” in McDonald’s speak — provides three opportunities to check that what the customer requested is what the customers gets.

That’s crucial, because about 70 percent of sales are made to people who don’t leave their vehicles. To make the experience more pleasant, the company has also asked restaurants to turn off prerecorded drive-thru greetings so that real-time workers say hello to customers instead. And then there’s this: Employees should no longer fold over the tops of paper bags but will leave them open so contents can be inspected.

“They’ve got to get it right in the drive-thru because it touches so much of their business,” said Peter Saleh, an analyst at BTIG Research. “Things are moving in the right direction.”

Accuracy had become an issue, particularly after the menu grew unwieldy over the past five years with the addition of a slew of new offerings, such as honey mustard and chipotle barbecue snack wraps, and the introduction of limited-time specials like Mighty Wings. So over the summer, the chain removed more than half of 130 offerings from outdoor menu boards, highlighting just bestsellers. “Simplifying the drive- thru operation underpins everything else we’re doing,” Chief Executive Officer Steve Easterbrook said on a conference call in October.

Since becoming CEO in March, amid the company’s worst sales slump in more than a decade, Easterbrook has made waves, turning breakfast into an all-day thing, demanding toastier hamburger buns and experimenting with kale. He’s spearheaded initiatives to streamline kitchens, speed up service and improve order- precision. And his efforts got a boost last month when McDonald’s announced a gain in U.S. sales after seven consecutive quarters of declines. Now the 48-year-old, who previously announced plans to cut costs and return more cash to shareholders, expects to reduce overhead expenses by $500 million a year.

Other Routes

But first, the basics. Service had slowed to the point that drive-thru waits in 2013 grew to their longest since at least 1998, according to a study by QSR magazine and Insula Research; 2013 is the most recent year for which data is available. That year, McDonald’s got about 88 percent of its drive-thru orders right, better than some rivals, including Wendy’s Co., but worse than Taco Bell and Chick-fil-A.

“We’ve got humans working in the drive-thru. There’s just no way to automate that,” said Dick Adams,  a restaurant consultant in San Diego and a former McDonald’s store owner.

Competitors are taking other routes. Starbucks Corp., a leader among fast-food companies with its mobile-ordering capabilities and rewards program, is introducing video screens at 2,400 of its U.S. drive-thru locations. The screens, which allow the person in the car to see the person in the store, are part of a push to use technology to improve efficiency and personalize service.

Accuracy Improvement

At McDonald’s, ask, ask, tell started over the summer; it’s optional for franchisees, who own about 90 percent of the chain’s 14,350 U.S. stores. Here’s how it works: After a customer orders, an employee repeats the full order and asks if it’s correct, and the customer is asked again at the window where he or she pays. The tell comes when the food changes hands — the employee reminds the customer what’s in the bag.

“These actions continue to show how we are changing and building a better McDonald’s,” said company spokesman Jeff Mochal.

Time-consuming? Maybe, but Terry Smith, who owns three McDonald’s restaurants in southern New Jersey, said he’s seen order accuracy improve by 2 to 3 percentage points since his stores started using ask, ask, tell.

“You’re probably going to add a couple seconds, which I don’t think will be huge as long as you’re creating a friendly experience — and getting the order right,” Smith said. “Customers are getting the items that they want.”

Smith recently turned off the impersonal recorded greeting in the one location of his that used it. Now staff greet customers directly and both parties appreciate the change, he said. “It creates at least a little, quick dialog that they both enjoy.”

Written by Leslie Patton of Bloomberg

(Source: Bloomberg)

McDonald’s is Slashing Costs, But Can it Do More?

© Ben Gabbe/Getty Images
© Ben Gabbe/Getty Images

As McDonald’s  (MCD) embarks on a prolonged plan to regain momentum and set its restaurants up for more growth, CEO Steve Easterbrook said the company has “stretched” itself with its cost-cutting program.

Easterbrook shed some light on its financials in an interview with CNBC’s “Squawk on the Street.” A day earlier, the company provided an update on its turnaround plan during about four hours of presentations for its investor day. As part of the update, it boosted its net annual general and administrative expense savings target to $500 million, the vast majority of which the chain will realize by end of 2017.

Its stock price was up slightly on Wednesday.

But can the Golden Arches do more?

“No we’ve stretched ourselves, and that’s a net savings number because we’re going to continue to invest in the business,” Easterbrook said.

“What we don’t want to do is impact our ability to grow, and we do not want to disrupt the momentum we’re seeing in the business because that is where the greatest value creation is for all stakeholders, including shareholders,” he added.

While the chain also seriously considered a REIT as part of its financial review, ultimately the decision against the idea was “absolutely unanimous,” Easterbrook said.

As the company ups its refranchising target to 4,000 restaurants through 2018, Easterbrook cautioned against thinking its hefty 3 percent dividend could be in trouble.

“We generate a substantial amount of cash,” he said. “We will have substantial funding for dividends as well.”

Written by Katie Little of CNBC

(Source: CNBC)

A Large Order of McDonald’s Fries Costs About $126 in Venezuela

© Provided by Business Insider McDonald’s

The good news is McDonald’s is finally bringing back fries in Venezuela, after getting rid of them last year, according to the AP. The bad news is the regular will cost about $79 (500 bolivars), according to the country’s strongest exchange rate.

Worse, a large will cost about $126 (800 bolivars).

The exchange rates were calculated at the time of publication.

Still, at Venezuela’s black market rate, these prices would be $0.64 for the regular, and $1.15 for the large, according to Fusion.

However, at the black market exchange rate, Venezuela’s minimum wage is only about $13 per month.

So, with those numbers, one large fries would cost nearly 9% of a person’s monthly wage.

Venezuela’s economy has been in a tough spot for a while now. It has been struggling with rampant inflation, dwindling FX reserves, and lower oil prices.

And analysts haven’t been feeling too optimistic about its immediate future.

“Venezuela seems to be going from worse to worse,” writes RBC Capital Markets’ Helima Croft wrote earlier this summer.

Those $126 fries are definitely a turn for the worse.

Written by Elena Holodny of Business Insider

(Source: Business Insider)

McDonalds is Testing Sweet Potato Fries

© Scott Olson/Getty Images
© Scott Olson/Getty Images

It’s not easy to quantify a nation’s feelings about side dishes, but it’s safe to say the sweet potato fry’s stock is rising. Google Trends says interest is up, and in this reporter’s anecdotal experience at dinner tables, they dominate the standard french fry in a head-to-head battle by an enormous ratio.

Though the french fry is still as American as ever—and the undisputed champion as a burger companion—McDonalds has recognized the appeal of the sweeter, orange variant and begun a trial run of sweet potato fries in Amarillo, Texas, reports Eater.

“Sweet potato fries are being tested in some Create Your Taste test restaurants in Amarillo, and we’re gathering valuable customer feedback on them,” a company spokesperson told the food publication. If it goes well, it’ll likely get rolled out on a larger scale where the company can collect more data about its demand and feasibility as a permanent menu option.

For some of us, that is sweet news indeed.

Written by Ethan Wolff-Mann of Time

(Source: Time)

McDonald’s Wants to Redefine What $2 Buys

Provided by CNBC

Call it the new dollar menu.

McDonald’s (MCD) is asking franchisees to approve a new value platform, with two-for-$2 menu offerings, a source confirmed to CNBC. Its advertising firm has already approved the new value message.

Franchisees will vote on the potential long-term value deal, which would include items like small fries and McDouble, by the end of October.

During its last earnings call, McDonald’s CEO Steve Easterbook stressed the need to return “to winning on value” and said the fast-food giant was evaluating options for a longer term value platform nationwide.

Written by Katie Little of CNBC

(Source: CNBC)