McDonald's latest experiment: Steak for breakfast
It keeps trying for a new hit. In addition to the new morning item, it's testing multiperson meal boxes.
Frustrated by lackluster same-store U.S. sales, which fell 0.2% in August while the fast-food giant's overall existing locations posted a 1.9% gain, Thompson has been willing to try practically anything to attract customers. On Tuesday came news that the Oakbrook, Ill., chain is planning to add steak to its breakfast menu and is test-marketing a multiperson meal box.
These moves are clearly not designed for the health-conscious. Bloomberg News, which first reported the steak news, noted that the steak, egg and cheese biscuit with grilled onions packs a whopping 540 calories, roughly 30 more than the Quarter Pounder with Cheese and only 10 less than a Big Mac.
Timed with the start of the NFL season, McDonald's Blitz Box, which is available in the Kansas City area, includes two Quarter Pounders, a 20-piece Chicken McNuggets serving (840 calories) and two medium fries (374 calories each).
Whether these experiments will yield benefits for McDonald's is hard to say. Its recent new menu offerings such as the Premium McWrap and Mighty Wings haven't captured the public's imagination. This strategy also has a familiar ring to it.
Bloomberg News notes that Panera Bread (PNRA) and Cosi (COSI) have both sold steak at breakfast for a while. Breakfast, though, offers restaurants the biggest potential for growth, and McDonald's is eager to expand its foothold in the market. Earlier this year, it unveiled a new version of its Egg McMuffin made with egg whites. As for meal boxes, Yum Brands (YUM) has offered them through its KFC, Pizza Hut and Taco Bell chains.
Wall Street has been pressuring McDonald's to bolster growth after it posted disappointing earnings for two quarters in a row. Investors reacted positively to today's news, sending McDonald's shares, which have underperformed peers, up slightly in late-afternoon trading. Analysts think the stock has more room to run. Their average 52-week price target on it is $105.15, about 9% higher than where it currently trades.
Jonathan Berr owns a small position in McDonald's. Follow him on Twitter @jdberr.
Steak..............................I'm sure they use that term loosely.
"Steak"?? Like the "McRib" ground up mystery meat pressed to look like some kind of pork?
The ONLY time you ever eat at McD's is if you are "Locked up" and haven't taken a dump in a few days!!!!! That garbage will clean you out!!!!!!!!!!
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Reports say the generous benefactor behind the huge gratuities is a former PayPal executive.
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John Stumpf acknowledges that growth has been slow, but he says he's still optimistic.