Will bigger burgers bring back McDonald's customers?

McDonald's will be offering a trio of 1/3 lb. burgers in the US beginning in May in an effort to win back customers. McDonald's market share has slid in recent years as a growing number of  'fast-casual' competitors have entered the burger market.

|
McDonald's/AP
This undated product image provided by McDonald's shows the fast food chain's new trio of 'Sirloin Third Pound' burgers: the Steakhouse, foreground right, Lettuce & Tomato, left, and Bacon & Cheese. McDonald's says it's introducing the burgers for a limited time starting later this month, the latest sign the chain is pushing to improve perceptions about the quality of its food.

McDonald's is attempting to woo customers back with a well-worn tactic: A bigger burger.

Beginning this month, the fast-food franchise will introduce a trio of "Sirloin Third Pound" hamburgers to its US locations for a limited time. The suggested retail price is $4.99, making it one of the most expensive items on McDonald's menu. 

As the name suggests, the burgers will weigh one third of a pound. The three choices are bacon and cheese, lettuce and tomato, and a "steakhouse" option with mushrooms and onions.

McDonald's earnings have disappointed in recent years as a growing number of "fast-casual" competitors have entered the market. As a February 2015 report from the Australian market research company IBISWorld notes, "Relatively new players like Chipotle and Five Guys that offer customizable, gourmet meals have stolen market share away from traditional fast food operators such as McDonald’s and Burger King."

McDonald's has also faced increased criticism over the nutritional content and quality of its food. The company has responded by adjusting its menu: IBISWorld reports that the restaurant's lower-fat and lower-calorie offerings have been the primary drivers of a rebound in revenue in recent years. 

Perhaps the new burgers are a sign that the company is falling back on traditional marketing tactics. "It appears that McDonald's is using a tried and true strategy from online marketing: design an experiment and measure the results," says Eli Robinson, head of FranchiseHelp.com, in an e-mail interview. “I have no idea whether or not the new premium burgers will be the key to unlocking growth.”

Andrew Alvarez, an industry analyst at IBISWorld, says that McDonald's long-term success or failure hinges on its ability to pare down its menu while increasing the quality of its food. "While the company has made some strides in simplifying its menu offerings, it is still much to varied to be considered streamlined," he says.

"That said," Mr. Alvarez continues, "the vast discrepancy between dollar-menu value items and the premium price of the sirloin burger could end up ultimately harming earnings for the company. The quality of the meal is also at stake; that is, should the meal be prepared (pre-cooked instead of cooked to order) in a way that is inferior to its competitors, it will not likely be a success. Lastly, while this is a step in the right direction to correct its image, the company still has a long way to go in terms of simplifying its menu and convincing its consumers that its ingredients possess the same quality as its fast-casual competitors."

In 2013, the company dropped its Angus Third Pounders after customers complained about the cost, which at most locations was between $4.39 and $4.49. What's different this time around?

Robinson says, “It's a tactic, and generally the business itself will have the best idea of how to implement the correct tactics. From a strategy perspective, offering new menu items is a sign that McDonald's is not content with the current growth prospects."

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to Will bigger burgers bring back McDonald's customers?
Read this article in
https://www.csmonitor.com/Business/The-Bite/2015/0408/Will-bigger-burgers-bring-back-McDonald-s-customers
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe