McDonald's re-emphasizing its dollar menu

mcdonald's again leaning on dollar menu for rally

Chicago TribuneMarch 15, 2013 

BIZ MCDONALDS-DOLLAR-BIZPLUS TB

Aimie Zvosec of Chicago, left, and Dina Phillip of Naperville, Ill., dined on salads from McDonald's Dollar Menu recently. McDonald's will be introducing new items to spice up its value offerings.

CHUCK BERMAN — MCT

On a recent lunch break, John Kurzatkowski was enjoying two McDouble cheeseburgers, fries and a large Coke at a McDonald's in Oak Brook, Ill.

"I like that they're $1," Kurzatkowski, 31, said of the cheeseburgers, which he buys about twice a week. While the physician recruiter doesn't think price is everything, he concedes it's a factor.

"I noticed that Wendy's (burgers) went to $1.19," he said. "And I noticed I went there less often."

Kurzatkowski is the quintessential customer McDonald's can't afford to lose.

In the midst of its first soft sales patch in nearly a decade, the Oak Brook-based burger giant is re-emphasizing its Dollar Menu, a 10-year-old idea that became the linchpin of the last turnaround in its U.S. business.

The chain is shifting ad dollars to products for $1 and introducing new items to what's been a relatively staid assortment, including the two-patty McDouble, a fried chicken sandwich, yogurt parfait and side salad.

Analysts credit the renewed focus on the Dollar Menu with slowing what could have been a more rapid sales decline, but they underscore that the environment is more competitive than ever. Burger King and Wendy's are hitting hard on value and advertising premium items. The key for McDonald's, experts say, will be introducing compelling new products at attractive prices that keep customers like Kurzatkowski coming through the doors.

"We're aware that consumers are a little unsettled right now," said Neil Golden, chief marketing officer of McDonald's USA. "Whether that's higher gas prices or just overall not having as much week to week, we know the consumer is looking for great values in everything they're doing in the food arena. We want to make sure it's attractive to choose our restaurant."

Although Dollar Menu sales generally comprise just 13 to 15 percent of McDonald's sales in the United States, the offerings do drive traffic to stores, where customers sometimes buy a more expensive product.

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.

Golden said there's been "an acceleration of testing" of products in recent months for the entire menu, and also for dollar 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 stay 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."

Lexington Herald-Leader is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service