Just call it McChicken?
As beef prices soar, McDonald's new boss will add more chicken items to the menu.
CEO Don Thompson says he will be adding new chicken items to the menu instead of beef. Part of the reason behind that is to follow consumer trends. Americans are eating less beef now -- beef consumption has fallen for six years straight -- and McDonald's is responding to the change.
But there's a more practical motive here as well. Beef prices have skyrocketed as the size of the U.S. cattle herd has fallen to its lowest levels in decades. Ground beef hit an average of $3.02 a pound in March, the highest since 1984.
Those rising beef prices are hitting the fast-food industry hard. Wendy's (WEN) reported a lower quarterly profit than expected in May, largely because of higher beef prices. "The largest concern going forward would be what happens with beef," said Jerry Rebel, chief financial officer of Jack in the Box (JACK), in the company's February earnings call.
High beef prices have got to be a major concern for Thompson as he takes the reins at McDonald's. Raising menu prices is one response, but not one that Thompson probably likes. So he's taking a different route -- turning the focus to much less expensive chicken meat.
McDonald's plans to add bone-in chicken wings and cashew teriyaki salads with chicken to the menu, Bloomberg reports. "Our customers have given us permission to stretch our brand, so we are entering new categories with new products," he said at a consumer conference in May. McDonald's has also begun selling Spicy Chicken McBites.
This is a big change for a company that made its name on the hamburger. But expect competitors to follow its lead, particularly as the price of beef remains outrageously high.
Are we headed for a day when chicken, not burgers, rules the roost at fast-food chains? And are consumers going to accept the new menu?
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To all you people ,the only cage chickens are for eggs. All our chickens are goverened by animal health and welfare. They have to have at least 3/4 sq feet per bird. they are in a large house that is clamite controlled. we have strict rules on how to catch and haul them.
We cannot process a doa [ dead on arrival] chicken. These are sold for waste at around 7- 10 cents apound. it cost at least $1.35 to produce. We have vets check on them all the time.
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