Is McDonald’s backpedaling on fast casual with a low-price strategy?
The major news about McDonald’s coming out over the past year has depicted a chain revamping its look and feel to try to dump its budget image and compete with fast-casual restaurants. But its latest move seems to indicate that McDonald’s still wants – or needs – to compete on price.
The chain has begun offering $1 sodas and $2 coffee drinks nationwide in April in what The Associated Press is calling an attempt to bring in customers and turn around four years of slumping sales.
McDonald’s has struggled to reassert its relevance as customers have turned away from quick-serve restaurants. One of its most successful endeavors in that regard was the implementation of a long-demanded all-day breakfast menu. This generated a lot of news and lifted sales temporarily, but the sales bump didn’t stay for long. The chain also rolled out new Big Mac varieties and ran a Special Sauce giveaway.
On the tech side, the introduction of touch screen ordering in what was billed as the “McDonald’s of the Future” and an expanded “gastropub-style” ingredient list last year gave the impression that the chain was pursuing a new, fast-casual brand identity.
The ordering kiosks have made it into 500 U.S. McDonald’s locations so far and 2,600 globally according to an article in the Palm Beach Post, and by the end of 2017 are slated to appear in 600 McDonald’s restaurants in Florida alone. McDonald’s attributed a sales increase in Canada to the kiosks.
But a renewed focus on providing ultra-low-cost options seems like a backpedal on the “McDonald’s of the Future,” acknowledging that it is the price, not the dining experience, that can bring customers in the door.
Within a few months, McDonald’s seems to have gone back and forth on the issue. Recently CEO Steve Easterbrook said, according to Business Insider, that driving traffic with discounts and promotions will be the chain’s main focus this year.
But at the end of January, in the wake of a quarter that beat analyst expectations, Mr. Easterbrook said that the chain was on its way to being “recognized by [McDonald’s] customers as the modern, progressive burger company.”
- McDonald’s to offer $1 sodas after customer visits decline – Associated Press
- The McDonald’s of the Future Leans Fast Casual – RetailWire
- Fast food faster: McDonald’s also woos customers with ordering kiosks – Palm Beach Post
- Will Big Macs boost McD’s results as popularity of all-day breakfast wanes? – RetailWire
- McDonald’s is slashing prices again to lure bargain customers – Business Insider
- McDonald’s can’t keep up with its all-day-breakfast launch – Business Insider
DISCUSSION QUESTIONS: Is McDonald’s betraying its avowed goal to be seen as a “progressive” burger company by focusing on low-price offerings? Should McDonald’s still be focusing on cheap offerings to bring in customers?