Should McDonald's simplify its menu?

The hamburger chain is struggling this year, overshadowed in the US by Five Guys and other chains with far more limited offerings.

By Kim Peterson Sep 10, 2012 8:21PM
McDonald's (MCD) is stumbling this year -- shares are down 7% so far and sales are sluggish. The company plans to revive growth with new menu items, but maybe that's the last thing it should be doing, writes one investment firm.

"Simplifying the menu rather than expanding it would be one positive step in the right direction, as well as toning down the company's overall complex strategy," write the investors from Hedgeye.

Just look at who's winning the burger business right now. "Companies like Five Guys and Shake Shack are slowly creeping in and taking away share from MCD," Hedgeye writes.

Post continues below.
So McDonald's needs to be more like Five Guys? Very little chance of that happening. What we're instead seeing is a divergence of sorts in the fast-food business. Five Guys and Chipotle Mexican Grill (CMG) are making it big with quality ingredients that take time to prepare. The menus at both establishments are very simple, and people know that while there isn't much to choose from, what you get will taste very good.

The traditional fast-food industry, meanwhile, is scrambling to find new, exciting menu options to bring people back. The strategy has worked very well for Taco Bell, which became the turnaround story of the year largely because of its Doritos Locos Taco.

McDonald's hasn't had one of these lightning strikes in a while; the last gimmick that struck gold was its McRib sandwich. It needs another hit, something to stop the people driving by on their way to Five Guys.

Burger King (BKW) is looking for a new phenomenon as well, but as beef prices hit sky-high levels this year the chain began trying to sell people on chicken. New items coming this fall include an Italian basil chicken sandwich, popcorn chicken, a breakfast burrito and a raspberry smoothie -- none of which sound all that exciting.

So would a simpler menu help McDonald's? Only if the company used those cost savings to radically improve taste and quality. But that would mean dramatic changes to everything from ingredient sourcing to distribution methods to final preparation. And some customers would certainly revolt against systemic change on such a grand scale -- and the price increases that would undoubtedly follow.

The smarter path for McDonald's is to focus on healthier foods. It's emphasizing menu items that are fewer than 400 calories -- a nice tie-in to the Olympic games and a logical reaction to soaring beef prices. It needs to capture those families who are trading down from casual restaurants, and selling itself as a healthier option is key.

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Tags: BKWCMGMCD
82Comments
Sep 11, 2012 5:46AM
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They should probably focus on service. I love McDonald's but the service is so poor in most of them I just quit going. 
Sep 11, 2012 7:55AM
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Lord, this makes me laugh.  McD's is cheap, fast food.  It was never inteded to be top quality--for that you need to pay a little more at a different kind of restaurant.  Whining about the quality of a six buck meal...  WHF
Sep 10, 2012 9:00PM
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If the McRib does so well...then why not make it a permanent item on the menu???  It's silly to only bring it around once in a blue moon.  Bring back McRib in 2013!!!
Sep 10, 2012 9:00PM
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McDonalds needs to go back to it's roots.  Enough already with the "exciting new items".  All in all, it is much too confusing to try and eat at McDonalds.  Even their physical menu is too hard to understand and doesn't list just food .... they are always trying to shove a combo down your throat.  I often pass them up simply because it shouldn't be so hard to order some lunch.  And, even a lot of their employees are confused by the confusing, over crowded and limited menu and they just stand there trying to read that awful  marquee menu. 

Sep 11, 2012 1:57AM
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I honestly think their sales would increase if the quality was better, and more consistent from restaurant to restaurant.  I have 3 Mickey Dee's locally that are excellent...the food is always fresh no matter what you order.  The other several dozen are hit or (mostly) miss.  What's the point in having a chain of restaurants if the food varies wildly from place to place?

 

They also need to do away with the entire "combo meal" concept.  It worked for awhile but then they started pushing the dollar menu, and a lot of people started to realize they didn't really need to pay $1.75 for a fountain soda that is half ice.  Stick with what works.  An a la carte menu is fine.

Sep 10, 2012 8:45PM
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For Ronald's sake----simplify the menu!!!!
Sep 11, 2012 8:10AM
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Quit trying to upsell me the flavored coffee crap! I go there for a breakfast sandwich or burger and fries and I'm asked, "you want to try a blah blah blah coffee today?" NO stop asking me
Sep 11, 2012 6:29AM
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Hire some mature people who CARE.  No greeting at the counter, no thank you, no nothing.  Stoic, bored robots waiting on you.  Simplify menu, get back to burgers and fries and leave the other crap to the O'Charley's, etc.
Sep 10, 2012 10:07PM
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I don't need more options on the basics...just make the damn Big Mac without all the sauce in one huge glob in the middle making the middle inedible...OR? try not stacking all the pickles on one corner of a burger. TRAIN your minimum wage emplyess how to make a sandwich or better yet?  pay em a little more so they CARE!  if I could add to the menu it wouldn't be sandwiches, but sides.  How about potato salad or coleslaw or baked potatoes or sweet potato fries? The sides are a major reason I only choose McD's 1-2 times a year.
Sep 11, 2012 12:55AM
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there is something very unappealing about gambling, when going to mcd for food it's alway a gamble, was the food cooked yesterday and kept in a "warmer" until you get there, was it cooked this morning, and then kept in the "warmer", or if you were really lucky, it might actually have been cooked fresh.

 

 room temperature food that was cooked hours ago, is becoming a trademark of the mcd brand, no wonder the sales are down.

Sep 10, 2012 11:53PM
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The quality of the larger burgers is just not very good.  The Quarter Pounder has very foamy texture beef.  More often than not, I just get two hamburgers rather than one bigger burger mostly because I don't care for the texture of the larger burger patties.  Even the Angus patty isn't anything to write home about.  Perhaps if the burger patties tasted like they actually had seasoning on them, it might be better but most of the time, the burgers seem like pink slime is the main ingredient.....nothing you would recognize as actual hamburger.

 

Bring back a regular shake, and not something put in a plastic container with whipped cream and stuff.  The rest of the new drinks are just big old sugar bombs and not anything I want to drink with a meal. 

 

The menu boards have gotten to the point that they are impossible to look at and quickly order, which means I go for the same old tried and true.  The salads are unimpressive.  The chicken sandwiches have no flavor.  The filet-o-fish is still good although it seems smaller than it once was.

 

Breakfast is still the best meal they have at this point.  Nothing beats an Egg McMuffin.

Sep 11, 2012 8:02AM
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Other than breakfast, I stopped eating at McD's long ago. The burgers don't taste that good and I'd rather spend the money on better quality food.


Sep 10, 2012 10:18PM
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Simplify and lower the prices.

I love their fillet-of-fish and use to buy a half dozen at a time.  Imagine my surprise when my fillet's that used to cost about $6 ($.99 menu) now cost about $20.

I no longer get my fillets at McD's because of the convenience, but buy them at COSTCO because they are a whole lot cheaper and I don't mind firing up my toaster oven.

McD's lost a customer because of price.
Sep 11, 2012 9:13AM
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I remember when they had a real simple menu, and when they started..

Burgers(2-3),fries,milkshakes,pop/soda(about 3 flavors) and coffee.

Milkshake,was the most expensive at .25 cents.

They made millions, but not quite billions off of that alone.

Sep 11, 2012 10:56AM
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Food "quality" and consistency has declined at MD.  The burgers don't look or taste like they should.
The stores also seem to have problems properly cooking "premium burgers" currently on the menu. When properly cooked, they, at least, look and taste more like the classic American burger.

Sep 11, 2012 2:01AM
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Maybe one place to start would be some less annoying commercials.   In their recent TV ad's, they are saying "you're smart".   Basically just because you ordered some lousy crap off their menu.   What a 'low bar' to set.

 

I really miss the old days of McDonald's.   When they had a respectable operation.

Sep 10, 2012 11:31PM
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mcdonlds  needs a bigger value menu  like wendy's they have  a 99 cent menu  thats puts mcd's value menu to shame  americans want more for there dollar  wendy's is doing that and they are  doing very well.  mcds  needs to offer a betterdollar menu    you can get a 5 piece mcuggets at wendys for 99 cent along with burgers   chicken wraps   bacon burgers   frostys  chickn sandwichs   you go to mcds  and only have 4 items for    a  buck
Sep 11, 2012 11:19AM
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Am so SICK of McD'  ,  or any other fast food!  
Sep 11, 2012 6:29AM
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The one thing I enjoy about McD is their breakfast menu, but it has gotten out of hand price-wise. Also, several years ago I read that McD was going to serve breakfast all day, but have not heard any more about that.

 

I agree, too many item on the menu Just concentrate on less items w/better quality. When I do go, I usually get one of the extra value meals ($3,$4) and get bottled water as the drink. Otherwise te price rivals a sit down restaurant. Also, ther fries are doused with salt that make them almost inedible.

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