McDonald’s Menu Adjustment Pays Big Dividends
Companies in the retail industry often face some of the most significant challenges to achieving consistent growth in revenue and profits. Large companies with very recognizable brands like Dell, Wal Mart, Home Depot and Microsoft as examples have all recently reported issues that have affected profit trends.
Not that long ago McDonalds was in the news as being one of the companies that was experiencing difficulties with profit performance. Now that has changed and McDonalds has been reporting very good sales and profit growth in recent quarters while some of the leaders in recent past like Cheesecake Factory, Outback Steakhouse and a number of others have been reporting softening sales and profit trends.
What’s changed and what has McDonalds done different to capitalize on the changes. The rise in interest rates is no secret as the Federal Reserve has just announced the continuance of their “let’s kill the economy program” with the 10th or 14th or whatever in a row increase in rates. Then there is the ongoing international issues which continue to keep the price of oil at record highs. So while unemployment remains relatively low, the costs associated with credit card debt and gasoline prices affect a lot of things including where people eat and how much they will pay for a meal.
Another trend is the increase publicity on the obesity issue in the US which seems to have had an impact on what foods people order to eat. McDonald recognized this trend and started adding appealing salads to its menu about three years ago. The salad category is actually accounting for a significant portion of their increased sales and profits. At the gym I visit there is a big poster ad for McDonalds grilled chicken salad. Not only is it big, it is appealing.
Public companies offer tremendous insight as to strategies that work and don’t. Today’s Success Tip is pay close attention to the trends and adjust your offer accordingly.
In the next Success Tips we will review what is happening at Federated Department Stores.
Steve Pohlit, Business Consultant
“Helping Business Make Extraordinary Profits Now”
www.stevereports.com
www.stevepohlit.com
