What follows all-day breakfast at McDonald’s?
There’s no doubt that McDonald’s business has benefited from the decision to make items from the company’s breakfast menu available throughout the day. In July, management made the decision add more breakfast sandwiches to that offering — Biscuits, McGriddles and McMuffins. Coming off a quarter in which McD’s posted a 1.8 percent increase in same-store sales in a softening market, some wonder how long the chain will continue to see a bump from breakfast and what the company plans to do next to keep sales momentum going.
Thirty McDonald’s franchisees surveyed by Nomura are expecting same-store comps to fall nearly one percent in the current quarter. Those polled have a number of gripes with McDonald’s, including what they see as excessive discounting, which drives profits down, a bloated menu with too many slow movers, and increased labor costs, which put a further strain on the ability of franchisees to make money.
The problem of having too many items on the menu has slowed the ability of restaurants to fill orders placed by customers. While adding breakfast has increased sales, some say, it has also made it more difficult for franchisees to deliver on the promise of fast food. To be sure, McDonald’s is not alone in this regard. A study of the drive-thrus at 15 quick-service and fast-casual restaurants by QSR found times have slowed across the industry.
Richard Adams, a former franchisee who runs Franchise Equity Group, is among those who think that all-day breakfast can only do so much for McDonald’s. He told CBS News that the company benefitted in the last quarter of 2015 because of warm temps across much of the nation, something that is not predicted for this year.
“If we have a normal winter, it will be impossible for McDonald’s USA to show positive sales numbers over the next six months,” Mr. Adams told CBS. “All-day breakfast has been an interesting promotional activity, but it hasn’t had a big impact on same-store-sales.”
McDonald’s reports its third quarter results today.
- What McDonald’s needs: A follow-up to all-day breakfast – CBS News
- McDonald’s franchisees reveal the 3 things that are killing them – Business Insider
- The 2016 QSR Drive-Thru Study – QSR
- McDonald’s Reports Second Quarter 2016 Results – McDonald’s Corporation
- Yes! McD’s McGriddles all-day, every day – RetailWire
DISCUSSION QUESTIONS: Do you think all-day breakfast can continue to lift McDonald’s or does the chain need to make menu changes to keep from sliding back? What would you do if you were in charge?