McDonald's to Shift Focus to Value Menu
OAK BROOK, Ill. -- As McDonald's Corp.'s same-store sales show sign of strain, the fast-food giant's new CEO said it's time to focus more on value offerings.
During McDonald's earnings conference call yesterday, the company reported that same-store sales rose 3.6 percent in its 2012 fiscal second quarter, compared to the same timeframe last year. Although the gain in sales may seem strong, it pales in comparison to the quick-service restaurant chain's 2012 first quarter, when same-store sales increased 8.9 percent.
"Now is the time to focus on guest count growth and market share gain," said CEO Dan Thompson, as reported by Nation's Restaurant News. "We go hard at that in times like these, even though it means an investment."
According to the news outlet, shifting its focus to a value menu would likely require a massive marketing expenditure, but could shore up traffic, which would allow the fast-food chain to hold on to its customers and convince them to buy regular-priced items once the global economy improves.
"Value is not a new thing, the question is how much you address [it] in your media mix," Thompson said. "You have to also have a premium product message in the marketplace, and we haven't given up on that. It's a tweak in our marketing mix."
However, Thompson did admit during yesterday's conference call that a mass exodus by customers toward McDonald's Dollar Menu did not cause the same-store sales shortfall. Instead, he cited increased marketing by Burger King Brands Inc. and Taco Bell for the decline in same-store sales.
In related news, McDonald's announced the launch of a new marketing campaign highlighting menu choices that contain less than 400 calories. The campaign, called "Favorites Under 400 Calories," begins today and is running in conjunction with the Summer Olympics.
"We've been looking at new ways we can provide easy-to-find and easy-to-understand, simple nutrition information," Neil Golden, McDonald's USA chief marketing officer, told the Chicago Tribune "We're always looking to evolve."
Menu items highlighted in McDonald's Favorites Under 400 Calories campaign include medium French fries, the Filet-O-Fish sandwich and the Oreo McFlurry.
"We want customers to understand that they can have food that they love, but food that they can feel good about enjoying regularly," Golden told the Tribune.
McDonald's ran a similar marketing campaign last year that focused on menu items containing 300 calories or less.