Does McDonald's have too many items on the menu?
Customers order food at a McDonald's restaurant drive thru in San Rafael, Calif. So many possibilities!
McDonald’s menu now has 145 items, according to Bloomberg, citing menu researcher DataSsential in Los Angeles. That’s up from about 85 items in 2007. Offering more choices -- especially more healthy and premium choices -- attracts more customers, so the thinking in the fast-food industry goes, and McDonald’s competitors have been doing the same.
But McDonald’s sales have been sluggish lately, and a smaller menu could lower costs and speed up service.
I headed out to a McDonald’s on a busy commercial strip near my office in Portland, Oregon, to experience the drive-through first-hand. I got a cheerful greeting from the server. “Hello, I’ll take your order if you’re ready,” she said.
I responded with my order -- Double Quarter Pounder with Cheese, which came with large fries and a Diet Coke.
The drive-through menu at this McDonald’s already reflected the company’s decision to phase out the Angus line of premium hamburgers.
McDonald’s spokesperson Danya Proud said in an email that McDonald’s is taking the Angus burger off the menu, and has already removed the fruit and walnut salad and chicken selects.
“We add and remove menu items all the time,” she wrote. “It's part of doing business for us and isn't new.” Proud said the company would not comment on the Bloomberg story citing email to franchisees, writing: “this initial story was based on information we believe was leaked/obtained through unauthorized means, we are not in a position to comment or confirm information as reported.”
Jim Yin, an equity analyst at S&P Capital IQ covering the restaurant industry, says McDonald’s probably is looking to scrutinize its menu, as sales have been depressed by the weak economic recovery.
“People are being hurt by the higher payroll taxes,” says Yin. “They’re more likely to trade down. So those items that are targeted to higher, wealthier income-brackets are probably not doing as well.”
Mary Chapman at the food research firm Technomic in Chicago agrees McDonald’s probably does need to trim its menu a bit to reduce costs:
“A smaller menu means more focus, easier training, a smaller kitchen perhaps, fewer steps," she says.
Chapman says McDonald’s won’t give up the effort to pitch some of its menu items as premium, aiming to sell to a slightly more well-to-do clientele, even as it tightens up its menu offerings. She points out that the company’s website features pictures of local produce suppliers.
“That’s certainly a way to position themselves as a premium item: ‘Our ingredients are so premium, I can tell you who picked them -- it’s this good-looking man with this nice orchard,’” she says. “At the same time McDonald’s is looking at their dollar menu.”
And Chapman says the phase-out of the Angus burger won’t be without its lessons for the company.
“With the Angus burger, it was a way to do a better burger to compete with the new burger chains that have higher-end hamburgers," says Chapman. "But McDonald’s is a smart company -- the Angus burger preparations are being tested on Quarter-Pounders. There are ways to add stuff that’s novel that’s not adding something to the core menu -- limited-time offers, specials -- the McRib sandwiches, they’ll come back because people are crazy about them."
McDonald’s and its competitors -- like Burger King, Wendy’s, and Taco Bell -- still have menus crammed with offerings. That’s to attract customers. Swarthmore College psychology professor Barry Schwartz has published an influential book about consumer choice in a modern market economy: The Paradox of Choice: Why More is Less.
Schwartz says having too many choices often leads to bad decisions.
“There are three things that having too much choice does,” Schwartz explains. “One, it paralyzes people into not choosing. Second, it induces people to make worse choices. And third -- even when you make a good decision, you’re less satisfied with it. Because as you’re munching your Big Mac, you’re thinking of all the attractive options you said ‘no’ to. And the result is that that Big Mac doesn’t taste as good. It actually doesn’t taste as good.”