McDonald's Confesses: Our customers are bored

This past Sunday, the Chicago Tribune featured a lengthy article (access restricted, so I reproduce some of the article below) about the success of McDonald's Dollar Menu.

Recently McDonald's had seen a slide in sales after many years of steady growth. "Critics" (unnamed) seem to feel that the problem is not enough "new products" in 2012.

As a result, there has been an "acceleration of testing" of new products - and MickyD's is about to get seriously experimental.

For the 10th anniversary celebration of its Dollar Menu, McDonald's is going to take a leap into the Great Unknown and add the Hot 'n Spicy McChicken to that menu!

Why did it do this? McDonald's found "a desire for experimentation" among its customers that was "not limited to specific age, gender, socioeconomic status or ethnicity." "There's a growing interest in food with bolder flavor," Neil Golden, chief marketing officer of McDonald's USA, said. "We wanted to make sure we made it easily available to all of our customers. You'll see bolder flavors in a lot of other things we're doing as well."

Oh, this is just too delicious! Let's translate all of that into something eaiser to, ahem, digest:

McDonald's customers - most of them, apparently - are really bored with the usual McDonald's selections. What they'd like, apparently, is food with some more flavor.

Another way to interpret this change in McDonald's customer base might be more simply expressed as: more and more Latinos are eating at McDonald's (or maybe it would be more accurate to say: McDonald's wants more Latinos to eat at its "restaurants").

You can't deny the demographics. The burgeoning Latino population in the U.S. threatens to make the GOP an irrelevancy (at least when all the very old, very wealthy, very white incumbents "move on" to a far better life - for everyone else). But those same Latinos also eat. And, let's face facts, "they" like spicy food.


From McDonald's doubles down on Dollar Menu

Leading up to the initial sales decline in October, critics say, McDonald's did not have enough new products in 2012. With a number of new items in the wings for 2013, such as a McWrap sandwich, and other items in test, such as chicken wings, the current Dollar Menu focus likely gives the chain some breathing room.

"You have to have some compelling products in the pipeline to get people to the restaurants," Morningstar analyst R.J. Hottovy said, adding that there need to be some higher-margin impulse items that can easily be added on to meals otherwise based on the Dollar Menu. "You have to have a compelling lineup of those types of products as well."

Golden said there's been "an acceleration of testing" of new products in recent months for the entire menu, and also for dollar-priced items. McDonald's started with the Dollar Menu because it appeals particularly to its most loyal customers, who he said "love the McDouble and the McChicken" but were simultaneously wondering, "Is there something that would make me want to come more often?"
In December, McDonald's moved its limited-time grilled onion cheddar burger to the Dollar Menu and credited the burger's popularity with better-than expected sales. The product will remain in stores until early June.

This month, as part of a Dollar Menu 10th anniversary celebration, the chain will promote a Hot 'n Spicy McChicken sandwich as a limited-time offer for $1. also tested a burger called the McCruncher for the Dollar Menu; it features white cheddar, crunchy onions and a chipotle ranch sauce.

McDonald's chose the spicy sandwich because the chain found "a desire for experimentation" among its customers that was "not limited to specific age, gender, socioeconomic status or ethnicity."
"There's a growing interest in food with bolder flavor," Golden said. "We wanted to make sure we made it easily available to all of our customers. You'll see bolder flavors in a lot of other things we're doing as well."

Industry experts have backed McDonald's strategy. "By focusing on the dollar menu, it is helping them drive traffic back into the restaurants," analyst Hottovy said of McDonald's fourth-quarter same-store sales, which just beat his expectation of flat performance.