McDonald's Plans To Sort Its Menu Blunder

McDonald's is devoted to fix the flaws in its menu so it paves its way to redemption

McDonalds Corporation has been stumbling since a fairly span of time where the efforts of Mr. Steve Easterbrook – the Chief Executive Officer of the company have helped in regaining stability for them. The all-day breakfast introduction in the United States has actually done wonders for the company.  However, the worst offering that the fast food giant could come up with from the perspective of an investor is actually the complete menu- this includes the Dollar Menu offering and a lot more.

As per a renowned financial blogger, Mr. Asit Sharma claims that the value menu is one of the “most detrimental” menu offering that the company could come up with as per a post published on The Motley Fool. The reason behind the failure of this offering lies in the inability to offer customers with a good bargain and at the same time churning in sales for the fast food behemoth.

"McDonald's 'Dollar Menu and More' was actually covering a vast price point so that it could succeed in luring customers and in return churn in revenues for the company as stated by Mr. Sharma.

“McDonald's 'Dollar Menu and More” was launched two years ago since the company had already evaluated that its dollar menu was not churning in profits. The recent value menu offering was derived with an idea to get customers on board who had a tight budget. Moreover, items were priced between $2 to $5 so that customers of all spending brackets copula benefit.

McDonald’s has finally decided to bid farewell to its menu in January. As a replacement, the company has decided to come up with a "McPick 2" menu, which will allow the consumers to pay an amount worth $2 for any two items of the McDonald’s menu.

According to Mr. Sharma, McPick 2 will not be a success "if customers add on other items (like high margin soft drinks) to orders, and if it wins repeat visits."

Mr. Sharma is quite optimistic about McDonald’s growth and 2015 was actually not a bad year for the company. As reported by Business Insider, “Sharma said the best thing McDonald's released this year was also a group of items: the all-day breakfast menu, which he said had an immediate, potentially long-term impact on the company's revenue and earnings.”

Hence, the company can actually can further pave its way to redemption by coming up with better menu offerings. However, MCD should not really repeat the mistakes it has committed in the past.

McDonald's Seems To Be Doing Great on Instagram

The food company seems to be working its way up on the social media, which is appreciated by analysts.

Recently McDonald’s Corporation was witnessed to pull off its turnaround plan as its share price climbed upwards on the index, along with some major disturbances in the kitchen, which was also considered as a problem for the food company. The company previously lagged behind in making a strong position for itself where the social media advertisement was concerned, which was not doing it any good as other rivals in the food industry seemed to be carrying out a strong social media campaign to advertise their food deals that helped them to increase their customers. Analysts in the food industry were previously seen to make critical remarks about how McDonald’s business needs to come up with the right kind of activeness on the social media in order to make its turnaround plan even better than it already is. It now seems that the fast food company has taken the analysts’ advice and is now on its way to make its advertisement plans much better than before. Recently, the giant posted a picture on Instagram to tell the customers of its all day breakfast plan, with a picture of four breakfast products on the menu in which the caption asked the users to comment the name of the deal that they liked the most. That picture alone reached out to a huge number of around 29,500 people who liked it and a massive 1,041 comments were made on it, which turned out to be a big change as compared to the posts made by McDonald’s management, which only received around 17,850 likes and roughly 226 comments on an average. Analysts are of the opinion that this progress in receiving more popularity on its most recent post other than its other posts shows that the giant needs to get even more active on the social media, as it will be definitely be welcomed by the customers on great level. It is also believed by the analysts that the food giants, which actively keep updating their social media profiles, are often seen to be attracting more customers towards their food deal than the other companies that are not so active. The giant are showing some rapid adaptation to new technology as it was observed to have released an app for the customers to reach out to the McDonald’s restaurants without much ado, and the app has so far been downloaded around 2 million times already.

McDonald's Sales Stumble Despite Efforts

McDonald's continues to stumble in Q1 despite efforts to improve.

With many companies revealing their earnings report for the first quarter, McDonald Corporation has also unveiled their report. With this report of their performance in the first quarter, things are already a mess for them.

According to the report, the company experienced a massive decline in sales during the first quarter of fiscal year of 2015. The company’s business is stumbling since more United States consumers are opting out of fast food franchises and going towards healthier alternatives. The company’s performance has been disappointing in United States, Asia and Europe. McDonald’s restaurant during this tenure has taken several initiatives to revive it, but it seems like things are not willing to go their way.

The company’s problems are not short term but date back to the past few quarters where their performance has continuously slacked. MCD has tried to accustom itself to the changes in consumer demand but have not really succeeding in doing something concrete. They also came up with a complex menu, but companies like Chipotle Mexican Grill and Panera Bread tend to take the limelight away from them.

Wall Street had earlier predicted that McDonald’s stock performance would stagger by 1.8 per cent. However, the company also crossed that benchmark where now its stocks have gone down by 2.3%.

The company initiated several competitions and incentives based policies so that they could gain more diners but despite efforts sales fell by 2.6 per cent within United States. Moreover, the largest market for McDonald’s resides in Europe, but even then they struggled to a great extent in Russia and France. However, the company believes that the weak economy is the prime reason behind their stumbling in United Kingdom.

Apart from this, the food safety scare that occurred in Asia and Middle East resulted in a drop in sales by 8.3 per cent. Thus, all in all, the sales record has resulted in the operating profit margins of the company to compound to 28 percent for Q1.

The company itself believes that this will continue for them in the months ahead as it expects sales to decline even further.

Mr. Steve Easterbrook, the new chief executive officer of McDonald’s has taken several initiates that will help them pave their way to glory. This includes a comparatively simplified menu, the company put an end to stores that were not doing well and also worked on increasing the wages of employees. However, the efforts taken seem all in vain.

“McDonald’s management team is keenly focused on acting more quickly to better address today’s consumer needs, expectations and the competitive marketplace,” mentioned Easterbrook in a statement.