McDonald's Slashes Menu Items

mcdonaldPrompted by the pressure of sale declines and demands for healthier options, McDonald’s was forced to cut seven items from its menu. After six continuous quarters of diminishing same-store-sales in the U.S., cutbacks on their crowded menu were necessary.
Same-store-sales is the analysis of a retail chains store that has been open for longer than a year. Data during a fiscal quarter is compared to the same period in previous years to determine how much a sales have grown. Investors use this data to compare growth attributes to sales for a particular location or opening of new stores. Although new stores represent growth, same store sales contribute to a strong brand.
In recent years, McDonald’s added in influx of menu items to better compete with other fast food chains. However, statistics have shown a continuous decline in sales, causing the chain to take a different route. Customers want a simpler menu. In 2007 the menu only had 85 items, but now consist of approximately 120.
McDonald’s stopped producing and serving menu items as supply drained. This ‘rolling removal’ took the Deluxe Quarter Pounder, six chicken sandwiches, and one wrap. Although about half the menu is expected to be cut.
The extensive menu has affected the chains drive through wait time. Essentially cutting the menu will also shorten average wait time, which is the longest it has been in fifteen years.
Crowded menus also put pressures on franchise owners. Only about 15% of McDonald’s are corporate owned. A large portion are joint ventures or operated through franchise agreements. They force new items on owners to try to drive up sales only to end up decreasing production time.
Currently the chain is still testing new menu items and other strategies to increase revenue. Ninety four of their San Diego locations are experimenting with all-day breakfast. Sirloin burgers are also continuing to be tested. Despite the need to limit the menu, new foods will be added to appeal to customers current tastes a preferences.
Although McDonald’s had amassed the largest share of burger fast food restaurants, Burger King just released its best quarterly sale growth in a decade.
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