Why McDonald’s Suffered Its Worst Day Ever Because of French Fries (or Lack of Them)
McDonald’s recently had it worst day ever on the stock market. Shares plunged 4.8% on March 2, 2018, marking the fast food giant’s biggest one-day tumble in almost a decade. Experts proposed the company’s slumping stock was tied in with slow sales of the chain’s new “$1 $2 $3 Menu,” which rolled out in January 2018.
From busy working people to hurried families, many of us seek out restaurant food that’s quick and cheap. So what’s not to like about a value menu? Here we’ll take a look at some reasons why the McDonald’s $1 $2 $3 Menu might be causing more trouble than sales for the chain.
1. The selection is sparse
It could be argued the selection is sparse, especially for anyone who wishes to strictly stick to just the $1 items (think poor college students).
- $1 menu items: Sausage burrito, McChicken, Cheeseburger, Any size soft drink
- $2 menu items: Bacon McDouble, 2-piece Buttermilk Crispy Tenders, Sausage McGriddles, Small McCafe
- $3 menu items: Triple Cheeseburger, Classic Chicken Sandwich, Sausage McMuffin with Egg, Happy Meal
Are the three tiers of pricing unnecessarily complicating things? This wouldn’t be the first time that’s happened for the fast food giant. In 2014, executives blamed slumping sales on an over-complicated menu. Inc. referred to the new menu as the “not-really-a-Dollar Menu.”
Next: Timing really is everything.
2. It was advertised too early
Although the new menu launched in early January 2018, it was announced more than two months prior. This gave competitors time to react. Taco Bell overhauled its value menu, with around 20 items priced $1 across the board. Wendy’s quickly joined the fast-food price war, expanding its 4 for $4 deal to include eight options — including fries (but more on that later).
“We believe McDonald’s early signaling of this initiative may have invited a flurry of competitor responses and diminished its overall impact,” said David Palmer from investment bank RBC Capital Markets.
Next: Other menu items were left out in the cold.
3. It may have hurt other menu items
The marketing by McDonald’s for its new value menu might be negatively impacting sales of regular menu items, some speculate. “Our sense is that the $1, $2, $3 platform stole attention from local marketing, particularly at breakfast, which likely slowed as a consequence,” RBC Capital Markets’ Palmer said.
The worry about the new menu stealing attention away from other standard menu items seems a valid one, especially when it comes to breakfast, where the chain has a strong lead over its competition.
Next: But where are the fries??
4. It doesn’t offer french fries
It’s not called The Golden Arches for nothing. People tend to love McDonald’s fries. Just eating one fry is said to release large amounts of dopamine in your brain. Why didn’t the company offer up any of this golden greatness on the value menu?
“We believe the menu’s position as a variety play … lacked the ‘hero’ item necessary to resonate with value-conscious consumers.,” Capital Markets’ Palmer said. We think he’s talking about fries. Is it possible simply putting fries on the menu could have prevented the trouble in the first place?
Next: Another group of customers left out
5. No meatless options
During a time when many are seeking meatless options (like vegetarians or those observing religious rules during Lent), McDonald’s may do well to have some fish or vegetable-based options on the value menu. This could include the Filet-O-Fish (normally priced around $3.49) or Veggie McWrap. (The side salad is standardly priced at $1.)
Next: Who would have predicted an uproar over Hi-C?
6. Hi-C Orange is gone
This isn’t related to the new McDonald’s value menu, but it’s worth a mention nonetheless. The popular Hi-C Orange drink has been gone from McDonald’s since 2017 (it was replaced with Sprite TropicBerry), and customers are begging for it back on social media and through a Change.org petition.
The restaurant has lost at least some business as a result of this change. Here are some tweets which illustrate this:
- “Help me in boycotting McDonalds until they bring Hi-C Orange back,” —hoodopulence
- “I refuse to eat at McDonalds for getting rid of Orange Hi-C,” —aintnoonebutRJ
- “Until McDonald’s brings back Hi-C Orange, there will be no nuggets for me,” —_jajenkins
Next: Trivia time: What was the very first dollar menu item at McDonald’s?
Onion Nuggets were the very first dollar menu item, introduced in the late 1970s, according to Delish. This battered, deep-fried snack wasn’t on the menu for very long, the story goes. Perhaps it was because McDonald’s couldn’t come up with a more appetizing-sounding name for them? Another aspect we find intriguing is that according to the ad, they were only served from 4 to 9 p.m. (Why not at 3 p.m., for example?)
Next: McDonald’s Dollar Menu history
McDonald’s Dollar Menu history
McDonald’s originally introduced its Dollar Menu in 2002. Eleven years later, the chain discontinued that menu, after franchise owners complained about being forced to sell “loss leaders” such as the Double Cheeseburger for just $1. Later in 2013, the chain relaunched the concept as the “Dollar Menu & More” which included a second tier of value items priced at $2 or more.
One thing’s for certain: Competition among fast food chains is fierce, so we see chains getting more creative to attract and keep customers. “We’re all fighting this fight, and I don’t think it’s going to slow down,” Jack in the Box’s executive brand president, Frances Allen, told Business Insider.
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