McDonald’s Worst Menu Item in 2015

Image source: McDonald’s Corporation

If McDonald’s new “All day breakfast” offering collectively wins the prize for best menu item in 2015, which item gets the nod for being the worst?That questionable honor also goes to a group: McDonald’s “Dollar Menu and More.”

Golden Arches logo source: McDonald's Corporation

Evolution:In late 2013, the “Dollar Menu and More” replaced McDonald’s “Dollar Menu,” which had been a staple of the company's restaurants for more than ten years.

Image source: McDonald’s Corporation

The BarbellMcDonald’s employs a price “barbell” strategy on its menu. Higher ticket items like the Filet-O-Fish and Big Mac represent one end of the barbell. Value items found in “dollar” groupings make up the other end of the barbell. Image source: McDonald’s Corporation

The Margin Squeeze

Over time, the popularity of the original Dollar Menu squeezed franchisee margins. When the “Dollar Menu and More” was introduced two years ago, it was meant to increase profits, by focusing on a sweet spot of items in the $2 to $5 range.

Image source: McDonald’s Corporation

At least, that was the textbook theory. In practice, $2 dollar items took share away from core menu items.

Ironically, this occured just as McDonald’s began to increase marketing around core sandwiches like the Big Mac and Quarter Pounder with Cheese.

Image: Flickr user “cdsessums” under Creative Commons license

The Big Idea:McDonald’s “Dollar Menu and More” was spread over too wide a price point range to create a win for both customers and the company. It erred by existing at both ends of the price barbell. Management has nixed the menu, effective January 2016.

Next month, McDonald’s launches the “McPick 2” menu nationwide. This allows customers to choose two items for a total of $2 from the following group: Small Fries, McChicken, McDouble, and the new Mozzarella Cheese Sticks pictured to the right.

It’s a return to the economic formula of the original Dollar Menu, and for now has the full support of franchisees.

The Solution

Have you tried these? They're not bad at all. Image Source: McDonald's Corporation.

• After a five week run beginning 1/4/2016, McDonald’s will change details of the McPick 2, but will keep the name intact.

• The concept is designed to increase traffic into restaurants.

• The promotion will succeed if customers add on other items (like high margin soft drinks) to orders, and if it wins repeat visits.

Facts and Observations on this Latest Value Menu Experiment:

• The addition of a novelty item (mozarrella cheese sticks) to the mix is also designed to spur traffic.

• One caveat: If patrons neglect core menu items for McPick 2, McDonald’s will face the same issues that eventually dogged the original Dollar Menu: decent revenue but razor-thin profits.

Facts and Observations on this Latest Value Menu Experiment (continued):

““Customers are looking for choice and flexibility. That's sort of the new definition of value.”

--Deborah Wahl, Senior Vice President of Marketing for McDonald’s U.S. Source: Associated Press

Finally, expect McDonald's to tweak the Pick 2 mix frequently in 2016:

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