Mickey D’s has been a hurtin’ puppy in the fast food industry for quite some time – its competitors have been eating its lunch (and supper, pun intended). Sales down, franchisees mad (and broker given the $$ spent on store redoes for a more contemporary look), and the “more healthy” food didn’t make it for them. So a change was made and imagine that – they actually listened to what customers wanted and SURPRISE!
Customers bought what they said they wanted to eat!
Sure, polls are one thing, sales are another and they don’t always align; this time, they did:
On Monday, McDonald’s said that same-store sales (those open for at least 13 months) increased by 5.7 percent in the last three months of 2015, more than twice what analysts had expected. The hefty jump is the largest the company has reported in almost four years. For years, adoring fans pleaded with McDonald’s to extend its breakfast menu beyond the current 10:30 a.m. cutoff. For nearly as long, the fast-food behemoth shrugged off the ask,
saying it doesn’t have the capacity to make breakfast and everything else at the same time. But this October, McDonald’s finally gave in, agreeing to offer Egg McMuffins and other breakfast fare from open to close. And the reaction has been overwhelmingly positive. “All-day breakfast was clearly the primary driver of the quarter,” McDonald’s Chief Executive Officer Steve Easterbrook told investors in a conference call following the company’s earnings announcement.
I am not a frequent consumer of fast food. Lately, in fact, I haven’t been eating out all that much. Why? A variety of reasons but a major one is just inertia – I work from home and it is rather easy to not venture out after work (I’d rather be blogging and I see that is taking time away from one of my favorite activities). I can look back and know that there have been times I haven’t left the house in three weeks – it just happens because my “outside window” is the Internet. Lazy? Sure, but….
….I have to say that for whatever reason, MD’s sausage burritos have become a hit with me – any day and any time. TMEW is really the breakfast eater in the family – the ask when we do go out is “are you still serving breakfast” an even if it is a late lunch, she’ll go right to the breakfast menu. Breakfast for dinner? Works for her!
Bottom line – while a number of franchisees complained that “Corporate” was shoving lower margin menu items “down their throats”, well, the results showed them wrong. I’m actually part of that – my visits to McDonalds has increased because of those breakfast burritos (maybe they are just my little guilty pleasure). So maybe they are low margin, but MY volume has gone up – voluntarily exchanging my dollars for something they had that I believed had better value for me (at some times) than my dollars. And I’m not a breakfast guy it all (pretty much, a cup of chocolate milk in the morning is breakfast and it has been for years). And I’ll continue to visit for as long as this hankering keeps going as the little secret is that TMEW prefers McDonalds and the few times we do the fast food route, she’d get what she wanted – and then I’d drive to another competitor’s store and order something else. Doesn’t happen right now.
That is the Free Market at work – no Central Planner, no govt flunky “designed” this change – it was pure competition (and the fear of failure) that drove it. It worked. It does work. Somebody once thought “Hey, this might work, this is a good idea” and it sold. Certainly selling to me!