Hungry for a hit, McDonald's adds McWraps
The new chicken sandwich has a big job, considering the Golden Arches' recent uncharacteristic struggles.
The chicken wrap sandwich comes in three varieties, Chicken & Bacon, Sweet Chili Chicken and Chicken & Ranch, and will be available starting April 1. Customers can choose to have their chicken fried or grilled, and the wraps are expected to sell for $3.99.
Wall Street doesn't seem too impressed with the offering. Shares of the Oakbrook, Ill., fast-food colossus were little changed in morning trading on Thursday. Nonetheless, expectations are high for the McWrap.
"McDonald's is hoping the McWrap, a chicken wrap that includes romaine lettuce, cucumbers and three sauces customers can choose from, will appeal to young people and those who have a health-conscious mindset and appreciate customizable products," says Ad Age.
If Subway is the target, the McWrap may not be an easy sell given that Subway is a formidable competitor. It eclipsed McDonald's in 2011 as the world's largest restaurant chain when measured by locations, with 37,000 franchises in 99 countries. Subway co-founder Fred DeLuca has a fortune estimated by Forbes at $2.6 billion. Although the Milford, Conn., company is privately held and doesn't report earnings, its profits are probably nowhere near what McDonald's earns.
Burger King (BKW) and Wendy's (WEN) have gotten better by copying McDonald's and adding more healthy items to their menus. Another strong competitor is Chick-fil-A, a privately held chain that emphasizes service, a rarity in the fast-food industry. Chick-fil-A reported that sales rose 12% last year to $4.6 billion even though it endured a maelstrom of negative publicity over its opposition to gay marriage.
Investors are hoping the McWrap gives McDonald's a much-needed shot of favorable publicity, given that consumers haven't shown much enthusiasm for Fish McBites, another new product. McDonald's reported a 1.5% decline in February global same-store sales, a key metric of revenue of stores open at least a year. The drop-off in the U.S. was 3.3% in 2012, though when a calendar shift is excluded, sales were flat.
Last year, McDonald's stunned Wall Street when it posted its first decline in monthly sales in nine years and replaced the head of its U.S. operations as a result. So, a lot is riding on the new McWrap.
Jonathan Berr owns a small stake in McDonald's. Follow him on Twitter @jdberr.
"Chick-fil-A . . . even though it endured a maelstrom of negative publicity over its opposition to gay marriage."
Your liberal negative bias against this fine business is showing. He never said anything against gay marriage. It's president merely stated his vies that marriage is between one man and one woman.
Your statement is dishonest. You owe Chick-fil-A an apology.
SO McD's wraps will be a hit, especially if they are a meal in hand. McD's chix sandwiches are also very good, compared to JIB-I couldn't finsih a JIB chix sandwich. It was terible, like rubber chunks mashed into a patty.
carl Jr's also had the best chix sandwich [crsipy bacon swiss] then changed it to "hand-breade filets" which were way smaller and less meaty/tasty. Wendy's chix sandwiches are also damn good but cost $6? WTF?
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