Changes to the McDonald's menu have led to some of the company's highest earnings in recent years - here's how they did it.
McDonald’s has been playing around with minor tweaks to its menu on a regular basis, but the company is about to take its offerings to the next level. According to a report from the Chicago Tribune, the fast food giant’s best sales performance in nearly four years can be attributed to recent menu changes.
The company has established a foolproof method for determining exactly which products customers would like to purchase in their stores. The world’s largest fast food chain has streamlined its process for developing and introducing new menu items to the point where it can roll out new products across its thousands of stores in just a few months.
The average McDonald’s menu has about 120 to 140 offerings, including different sizes. Of these items, roughly 100 of them are specific to a region, like the customer-created ChiTown Classic available in Chicago locations.
While the company allows franchises to pick and choose what they think will be the best sellers, it also requires that they carry a minimum of 40 specific items. These include the staples, like a quarter pounder with cheese, a McChicken, or a Big Mac, but have recently seen new additions to the lineup including wraps, salads, and even mozzarella sticks. Without fail, visitors to one of the company’s 36,000 restaurants around the globe can expect to be able to order the classic Big Mac, a cheeseburger, chicken Mcnuggets, and French fries.
Under the guidance of the company’s new CEO, Steve Easterbrook, the menu changes at McDonalds restaurants are only expected to push the company’s performance upwards. In 2016, the company expects sales to grow across the entire system by as much as 5 percent, operating income to grow as much as 7 percent, and hopes to see double-digit one-year return on incremental invested capital. The company expects a total of $2 billion in capital expenditures, which will be split between opening new restaurants and revamping existing locations.
McDonald’s has big plans for the future, and menu changes are just a piece of the puzzle. An investor report describing the company’s plan for growth in 2016 can be found here.