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McOperators Don’t Buy Dollar Menu & More

Filed under Discount, Equipment, Research

McD_DollarMenu_NewSandwicheMcDonald’s Dollar Menu & More may be popular with customers but some of the chain’s operators are voicing unhappiness that these low-price options lower checks, complicate kitchen operations and slow service according to the latest (61st) McDonald’s Franchisee Survey conducted by Janney Montgomery Scott restaurant analyst Mark Kalinowski.

Says one operator: “Only thing we are advertising is Dollar Menu & More. We have 25 items on the Dollar Menu with breakfast and lunch. Why would a customer order anything else? Can get a beef, chicken, potato, soda, or coffee. It kills service time with orders of 2-3 sandwiches at a time. Cannot hit service times.”

Franchisees are traditionally grumpy toward franchisors but bad winter weather that has depressed sales may be exacerbating the discontent. Kalinowski has lowered his estimate of McDonald’s December U.S. same-store sales by 100 basis points to -0.3%. For January, where much of the U.S. has seen negative temperatures, Kalinowski sees negative sales growth, lowering his forecast for the month by 420 basis points to -2.2% based on franchisees’ reports.

The Dollar Menu & More, expanded in November with five beef and chicken burgers priced at $2 or less, is the focus of many franchisees’ complaints. The discount menu “is not helping sales, but rather hurting sales if anything. We are selling far more Dollar Menu & More sandwiches, and less and less large sandwiches,” says one operator.

The Dollar Menu & More coupled with frequent limited-time-offer specials have made an already large menu too large, others argue. “Our menu has gotten too big. We are trying to do too many things and our service and quality suffer. Look at In-N-Out Burger, Chick-fil-A, Five Guys [Kalinowski notes: all privately-held]. Their menus haven’t changed in years and they do not offer discounts on a regular basis,” says one.

“The menu items introduced during the last year—McWraps, Quarter Toppers, and Dollar Menu & More sandwiches—have killed our service and totally upset our kitchens,” says another franchisee.

“Slow kitchen turnaround times; more new products that do not sell,” echoes another operator.

To improve kitchen efficiency, McDonald’s is testing a “High Density Kitchen” solution, Kalinowski says. It adds more refrigerated and heated holding trays and pots to accommodate the expanded menu. But with sales slow, asking operators to invest in more new kitchen equipment is a tough—and unpopular—sell. One operator calls the High Density Kitchen “lipstick on a pig.”

Says another: “The High Density Kitchen will help organize all products, but it won’t fix our problem. The math doesn’t work as it relates to production time or service time.”

The real problem is discounting, according to some operators. “Won’t help. No matter what. There is no way to make all those $1 or $2 sandwiches fast. We could do it when it was just the McDouble and the McChicken. But now with 25 total items, no. If you add crew it doesn’t cover the cost to make all the Dollar Menu crap. Haven’t sold a wrap in so long. No one remembers how to make one.”

11 Responses to McOperators Don’t Buy Dollar Menu & More

  1. Two reasons the privately-held QSRs are the best run operations in the business:

    * Cash flow stream that might go the shareholders is kept in the business to
    grow sales and improve the brand.

    * Private companies can avoid the desperate monthly scramble for same store sales

  2. Wayne

    Gradually over the last several years especially, McDonalds has tried to be a one stop restaurant. You can’t do that and be successful in fast food. Obviously they needed to expand a bit due to beef prices hurting their burger business, but I think there are too many choices and people would rather go somewhere they can choose what they want and get it quickly.
    I have heard a lot more people ordering from the Dollar Menu than ever before, because it is cheap. I think they would be better off having less choices and leave the choice to the sit-down/wait staff type restaurants. It takes far longer to make a decision on what to do get when you have so many choices (another reason the Dollar Menu wins, a small list of choices all in one place).

  3. tootsietootoo

    Mickey D’s food has been steadily going down hill for the last two years.
    Stale dry buns, unsalted fries, gross new sandwiches, things my dog even refuses to eat, and Bentley will eat ANYTHING.
    The only thing good on their menu are their regular cokes. (thank God they have not been brainwashed by Pepsi)and their iced tea. They are even making their hot chocolate with water now.
    I stopped going there long ago…sad, I remember when the sign said “Over 3 million sold”.

  4. Hal Robertson

    Hey Toots,

    McD has been making hot chocolate with water since ever since they started selling it. And you won’t have to worry about Pepsi being in McD’s. Never going to happen.

    Funny how you seem to believe everything has gone down hill the past two years and that your dog won’t eat it, yet you say you stopped going there “long ago”. Based on your commentary, I’m not sure how your comments are relevant to the new Dollar & More menu that is being discussed in the article.

  5. Rick Miller

    Hey Hal Robertson, McDonald’s has not been making hot chocolate with water for several years, so your comment is not very relevant either. Obviously you haven’t ordered hot chocolate from McDonald’s for literally years. But I do agree with the article’s statements about the dollar menu and more and adding too many products. It does hurt service times. Too many choices = more customer dissatisfaction.

  6. J.D

    $1.49 for McDouble. I just came from there: 2 bucks that’s what it would have cost me for a McDouble. Sorry McDonalds I’m not giving you $2 for a McDouble; hardly any meat on it. The prices are going up but the quality is going down. Why can’t you make it plain and simple and go back to the basics?

  7. bring back the mac double to the dollar Menu. you already took one cheese off the mac double before

  8. Both the McDouble and Bacon McDouble are on the Dollar Menu & More.

  9. D.H.

    Admin is correct – the McDouble and Bacon McDouble are on the Dollar Menu & More. Admin just neglected to tell that it is not on the Dollar side – It is on the More And More And More side.

  10. Joshua

    What people do not understand is this: It is fast food, it is a damn dollar (the Dollar Menu), you are not SUPPOSED to live off of it, and after taking those into consideration what do you expect? A surf and turf at Red Lobster or Longhorn? Yes every fast food joint has declined but so what! I do not have time to make lunch for work tomorrow (normally I do) in fact I rarely eat fast food but tomorrow to hold me over??? Pink slime or brown sludge, or whatever the hell the milkshake is, I am going with $2 and change… gonna get some kind of sammich and a small fries. I’m Lovin It? Twice a year is fine with me!

  11. Tim

    Sorry I know selling $1 burgers is tough on the pockets for owners but if they sell burgers for $4 I’m going to Braums or DQ for that price! Much more for the $ better quality and a lot of McDonald’s would cease to exist with out the $1 menu. Really if you could buy a much better product for the same price would you continue to buy the crappier product? That’s why the $1 menu stays and corp will let the owners take the big hit. People are not that dumb with money; they buy cheap for reasons non health related and McDonald’s knows it. They lose the $1 menu racket, they lose the millions served daily!