McDonald's set to drop items to streamline its menu
Chicago - The Angus burger is going away, and it may not be the only McDonald's dish on the chopping block.
The world's largest restaurant chain has also considered axing Caesar salads, the McSkillet Burrito, the Southern Style Biscuit and steak bagels, according to a franchisee email obtained by Bloomberg News. While the Angus burger contains as many as 820 calories and costs $4, the culling isn't simply about offering healthier fare and cheaper items. It's an effort by McDonald's Corp. to streamline a menu that has expanded by 70 percent to about 145 items since 2007 - straining kitchen staff, gumming up service and spoiling customers for choice.
"It's gotten to the point where the operation has kind of broken down, and that's all a symptom of the complication of the menu," said Richard Adams, a San Diego-based restaurant franchisee consultant and former McDonald's store owner. "They can't make the food fast enough."
In October, some McDonald's franchisees received an email from a regional representative proposing "core menu changes" based on information from customer complaints.
Teams had been formed to address menu size and understand "what's getting in the way of quality and service," according to the e-mail. Seven menu items were identified for potential removal. So far Fruit & Walnut salads, Chicken Selects and Angus burgers have been eliminated.
"We are constantly adding and removing menu items," Danya Proud, a McDonald's spokeswoman, said in an email. "It's not new for McDonald's. We've been doing it for decades!" She declined to comment on the email.
McDonald's Chief Executive Officer Don Thompson is trying to revive U.S. same-store sales, which dropped 1.2 percent in the first quarter. The picture improved in April, when sales at stores open at least 13 months rose 0.7 percent. McDonald's shares have gained 11 percent in the last 12 months, while the Standard & Poor's 500 Index has jumped 25 percent.
The shares have recently become less valuable to investors. They're trading at a 16 percent premium to the S&P 500 Index on a price-to-earnings basis. They were trading at a 25 percent premium on April 18, the day before the Oak Brook, Ill.- based company reported that first-quarter net income, at $1.27 billion on $6.61 billion in revenue, was little changed from the previous year.
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