How McDonald's keeps winning US customers
The restaurant chain has an uncanny ability to reinvent itself and grow sales.
The ability to keep reinventing itself to appeal to consumers domestically as well as internationally is the reason we think McDonald's deserves a higher price than the current market price.
We look at what steps McDonald's took that led to such impressive comp sales growth rates in the U.S. McDonald's competes with Yum Brands (YUM), Subway, Starbucks (SBUX), Wendy's (WEN), Chipotle Mexican Grill (CMG), among many others.
Most of the growth in comp sales can be attributed to increases in customer traffic or average spending per customer, since menu price increases were subdued in 2011. And since McDonald's seems to be omnipresent in the U.S., achieving either of the two is a herculean task. This says a lot about the company's ability to adapt to changing consumer demand and economic environment.
McDonald's was able to increase customer traffic through a combination of factors.
First, McDonald's extended the timing of its outlets or kept them open for the whole day. More than 89% of McDonald's outlets in the U.S. open by 5 a.m., and 40% are open 24/7.
New menu items
Second, the fast-food chain added menu products that helped attract a greater number of customers. In 2011, the company launched Fruit & Mango oatmeal, Mango Pineapple Smoothies, Peppermint Mocha as well as other items. The new menu additions continued in 2012 with the introduction of Chicken McBites and the experimentation with bakery products.
Such constant innovation is possible because McDonald's spends a great deal on research, development and testing of new products to ensure they appeal to American consumers.
Refurbishing/re-imaging existing restaurants
Third, McDonald's upgraded its restaurants to include more comfortable seating, free Wi-Fi and even McTV. In fact, the company plans to spend half of its capital expenditure in 2012, estimated at a whopping $2.9 billion, to re-image and upgrade its existing U.S. restaurants to make them appear more upscale.
This will help the company compete directly with Chipotle, Starbucks, etc., that fall into fast-casual or casual restaurant segment. Moreover, this will also help the company to some extent to cast off the stereotype of being a large scale, inexpensive burger serving restaurant chain and appeal to a wider range of consumers.
Mcdonalds' isn't too bad, but I think maybe they should try to offer some options on their menu like maybe a frysauce for their fries instead of just ketchup. And maybe they should push extra onions, lettuce and tomatoe to bulkd up sales. When I go to subway for example I like to get as much vegetables as I can and extra meat sometimes,...the vegetables help slow the digestion(the fiber in them) of the food and gives you a full feeling longer. At Mcdonalds it's only 25cents for a tomato slice on a mcchicken or a mcdouble (which is a dollar). I have been thinking about maybe ordering those with lettuce and onions(extra onions on the mcdouble is free for example). Some of the special sauces like at Burgerville and bakers burger (single unit place?) are really good on their hamburgers.
mcdonald's are a franchised company and some locations are owned alone! the fact that there food is bad is due to personal choice and what a person is used to eating, but they do need to look at what sales and at what does not and focus on that.
the facts are true about customer service! if you do not injoy going there you should tell a manager,the owner or not come back.
In the early near mid 1970's popped up Carols "aka Burger King" they were okay.
Then McDonald's came to town and Carols soon disappeared. McD's fast food tasted pretty darn good for awhile. Burger King entered the market " Have It Your Way " and they made their trademark. Eventually Wendy's came. Bit more expensive but a tastier burger and thicker fries you couldn't beat.
For your Dollar can opt to get the Cheap stuff at McD's or for an extra 20 cents on a Dollar get food that was Satisfying at Wendy's.
With so many people Budget Minded and Cheap it was easy to say McDonalds and still is. (Cheap and low end quality).
The better tasting and quality food is at Wendy's and still the same case today.
McDonald's is #1 cause it's cheap and fast and with so many Welfare recepients/ Poverty/ Low-Income that why they have Highest Numbers of customers.
The better Fast Food chain is Wendy's and always has been.
Mc Donald's being Number 1 in Quantity and a FARCE when it comes to QUALITY.
Eat at Wendy's and you'll be glad you did. Eat at McDonalds and your stomach turns and aches at every corner till you take a dump or barf it up.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
These hot movers could rise by double digits in coming months.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.