McDonald’s, Take Notes — Wendy’s Is Killing It With the Pretzel Bun
People up to date on their McDonald’s (NYSE:MCD) news knows that the fast-food chain isn’t doing so well. After once enjoying significant success in all of its many markets, especially at home, it’s safe to say the Oak Brook, Illinois-based company has hit a serious speed bump, and it’s one McDonald’s has yet to get over.
Different analysts have varying opinions about what CEO Don Thompson should do to resurrect the company’s success in the U.S., but it’s not as if the chief executive has been shy about sharing his ideas himself.
Following the chain’s latest disappointing earnings release last month, Thompson unabashedly said that the company needs to “re-establish the trust of consumers“ and revisit its strategies, telling the Wall Street Journal, “That means basic executive at a restaurant level, marketing engagement at a much stronger level, and also to make sure that our menu is relevant.”
That all sounds fine and dandy, except that Thompson’s assertions never really detailed how he plans on going about reestablishing said trust, and making sure the company’s menu is “relevant” could mean a lot of things. This is one of the first times the company’s executives have admitted to setbacks and strategy failures, but investors are still looking for concrete evidence that McDonald’s has a set agenda for change.
Though not in on the drama, the Wall Street Journal’s John Gara shared his own opinion on the matter in late January, outlining what he thinks McDonald’s should do and what it should learn from its competitors. The Journal reports that McDonald’s separates itself from its rivals by attempting to be strong in all areas across the board, instead of focusing on one item or product segment.
That may be a good plan in theory, but the problem is that the company is failing at it. Now, instead of dominating, it’s failing across the board. McDonald’s launched chicken wings, fish nuggets, bacon habanero ranch burgers, and a line of wraps among other things in the last year alone, and guess which one of these new menu items scored big with consumers? That’s right: None of them.
Wendy’s (NASDAQ:WEN) business, on the other hand, isn’t exactly thriving either, but the company is at least performing better than McDonald’s. That’s because the fast food chain has focused on its niche of burgers and, most recently, the pretzel bun. Wendy’s recently launched this popular menu item, which has proven to take off, and now its sales are recovering, while McDonald’s are still flailing.
If you think about it, it’s been a significantly long time since McDonald’s launched a new menu item that scored big among consumers — the reason for that may lie in its strategy to do everything at once, rather than focus on one product niche. Many analysts believe the company hasn’t been able to realize any success with its new products because it introduces new menu items too quickly, overwhelming both its consumers and its employees.
It’s still not clear how McDonald’s will forge forward and if it’ll cut back on new menu launches or continue a rapid-fire approach. However, the company has made it evident that it is at least putting more of a focus on its management of McDonald’s stores behind the scenes so that executives can ensure kitchens are up to date, employee numbers are where they need to be, and workers can make the new or old menu items flawlessly.
Considering McDonald’s latest snafus, it doesn’t seem as if it’s the right time for the company to try to introduce any big menu items. Still, if Taco Bell (NYSE:YUM) can strike gold with its Doritos Locos Tacos and Wendy’s can tout its pretzel bun, you’d think the No. 1 fast food chain could at least think of something to maintain its competitive edge.