Will McDonald’s Succeed In Keeping The Buzz Alive?
All Day Breakfast has been a big part of McDonald’s turnaround strategy over the last few months. After witnessing a slowdown in comps for a number of quarters, the company reported a 6% year on year increase in its comparable sales in the first quarter of 2016, primarily attributable to the introduction of “all day breakfast.” Its customer satisfaction scores rose to new highs in the months that followed, as did the company’s stock price. However, in the second quarter, the excitement around its new breakfast offering began to fade, causing comparable sales to come in lower than expected. Many fear that the “turnaround” has run its full course, and the trend away from fast food to healthy eating will again begin to show in McDonald’s top line.
However, McDonald’s is trying its best to keep the buzz alive, and fending for its dominant market share in the fast food industry.
Brand Value Of Major Fast Casual Restaurants
In the following note, we talk about some of its recent initiatives to keep the “turnaround” alive and kicking.
- To drive its comps higher, the burger chain is proposing a “Happy Meal” for breakfast for kids. McDonald’s has started a pilot test for the product in two regions, Tulsa and Oklahoma, in over 70 restaurants. The test will offer a choice between a happy meal with two McGriddles cakes, or with an egg and cheese McMuffin. Further, the Happy Meals will have sides of apples, yogurt, or hash browns, and also french fries in the afternoons and evenings. If successful, we can expect a nation-wide roll-out of the first new entree for Happy Meals in more than 30 years. It could also help the company annex a larger slice of the restaurant market.
- McDonald’s is expanding its all day menu to include items like McGriddles, hotcakes, sausage burritos, oatmeal, and hashbrowns, in addition to McMuffin and biscuit sandwiches introduced in September. Further, McDonald’s has also been experimenting regionally. For instance, McDonald’s Japan introduced a new flavor of french fries, combining pumpkin and chocolate, for Halloween.
- McDonald’s launched a web series on YouTube called “What’s Cooking?” which will showcase the preparation behind some of its most popular food items. The company is making several changes to its food menu to make it healthier, in line with preferences of the millennial consumer. Initiatives such as shifting from margarine to butter, piloting fresh patties, transitioning to free range eggs, and removing preservatives from some of its food items, are aimed towards this “healthier” shift. The video series can help change this perception by showcasing both the origin and preparation of its food and the healthier changes made in its menu in recent months.
Have more questions on McDonald’s? See the links below.
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- How Can McDonald’s Stock Price Be Affected By The Trend Towards Healthy Eating In The Next Year?
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- Why Has McDonald’s Stock Price Risen 20% Over The Last One Year?
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- Is McDonald’s Dependence On High Growth Markets Increasing?
- McDonald’s Versus Burger King: Whose Franchisees Perform Better?
- McDonald’s Slows Down In Q2’16, Despite Growth In Comparable Store Sales
- McDonald’s Q2 FY 2016 Earnings Preview: Investment In Quality, All Day Breakfast To Drive Revenues
- McDonald’s 2016 Revenues To Decline YoY Despite Improvement; To Pick Up Pace Thereafter
- What’s McDonald’s Fundamental Value Based On Expected 2016 Results? (Updated After Q1 2016)
- By What Percentage Have McDonald’s Revenues And EBITDA Grown Over The Last Five Years?
- What Is McDonald’s Revenue & EBITDA Breakdown? (Updated After Q1 2016)
- How Has McDonald’s Revenue And EBITDA Composition Changed Over 2011-2015?
- McDonald’s Q1 FY 2016 Earnings Preview: All Day Breakfast To Drive Comp Sales In The US
- Where Will McDonald’s Revenue And EBITDA Growth Come From Over The Next Three Years? (Updated After Q1 2016)
Notes:
- What To Expect From McDonald’s Q4 After Stock Up 13% Since 2023?
- After A 14% Top-Line Growth In Q2 Will McDonald’s Stock Deliver Another Strong Quarter?
- What To Expect From McDonald’s Stock Post Q2 Results?
- McDonald’s Stock Likely To Trade Lower Post Q1 Results
- McDonald’s Stock Up 16% Over Last Year, Can It Grow More?
- What To Expect From McDonald’s Stock Post Q4?
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