After two years of steadily declining sales, McDonald's turned their business around by making one change to their menu.
Both customers and franchise owners have been asking for all-day breakfast for years, but it wasn’t until Easterbrook took the helm that the company was able to make it a reality. The company has removed some of its less-popular items on the lunch and dinner menus to make space for the new breakfast options. No more McWraps for now.
Overall, McDonald’s removed an average seven items from their menus. In order to make sure locations remain stocked with ingredients and to keep orders smooth, this had to be done. Easterbrook asserts that there is an additional seven low-selling items that could be phased out in restaurants around the country. As options for customization increase, the company is finding that there is less need for discrete menu items with slight differences.
In recent years, the company has taken the strategy of offering a wide range of menu items, but offered little option to customize orders. The new strategy will likely continue to bring in more overall customers – the company’s sales have increased for the first quarter in nearly two years.
Reports on social media indicate that the company hasn’t smoothed out the new setup completely. Complaints about lack of breakfast availability have surfaced, but it will take many franchises time to catch up with the new company standards.
While some franchises actually reported decreased sales because of customers choosing less expensive breakfast items to eat during lunch and dinner times, sales of Egg McMuffins have increased by double-digit percentages.
The company also switched out the margarine in the breakfast sandwich for butter, which has received overwhelmingly positive feedback from customers. According to Kalinowski, franchises can expect to se an average 1.5 bump in quarterly sales, and a full percentage over the course of the coming year. Established locations had their sales increase by 0.9 percent in the third quarter of this year.
Investors think the company’s new strategy is a good thing for McDonald’s bottom line. Easterbrook is hesitant to project too far into the future, but he remains confident that all-day breakfast will continue to gain popularity and drive sales at locations across the country.
The press release outlining the details of the menu shift can be read here.