McDonald’s Corp. is thinking global but acting local.
The world’s biggest restaurant chain, hoping to appeal to wider swaths of Americans, is working to offer more locally relevant fare, such as pulled-pork sandwiches in Indiana, bacon and white-cheddar Egg McMuffins in Chicago and cranberry-orange muffins in the Midwest. These items aren’t available on the national U.S. menu.
McDonald’s has been facing more pressure from growing fast-casual chains, as well as smaller fast-food rivals that are more nimble with their menus. Burger King recently sold a teriyaki chicken sandwich, while Wendy’s Co. is advertising a strawberry salad.
McDonald’s, which promoted Steve Easterbrook to CEO in March, is betting on more appealing fare to turn around its flagging U.S. business. Sales at domestic stores open at least 13 months have dropped for six straight quarters as consumers defect to other restaurants. McDonald’s stock fell 5.6 percent in the past year through Tuesday, compared with a 5.2 percent gain for the Standard & Poor’s 500 Index.
“They have to keep coming up with ways to drive new traffic,” said Sara Senatore, an analyst at Sanford C. Bernstein & Co. “A broader product assortment, or one that’s more tailored locally, is probably going to attract more people.”
In the past year, McDonald’s restaurants across the U.S. have sold less-characteristic fare, including mini bundt cakes, grits, chorizo burritos and a variety of muffin flavors. Sometimes, thousands of locations sell the regional offerings, and other times the count is less than 100.
Even the cult favorite McRib sandwich was a regional offering in November, going on sale in about 75 percent of McDonald’s approximately 14,300 U.S. restaurants. Franchisees, who own about 90 percent of those locations, could choose whether they wanted to sell it. McDonald’s rivals have just a fraction of its restaurant base: Burger King has about 7,400 locations in the U.S. and Canada, while Wendy’s has 5,700.
The pulled-pork sandwich, slow-cooked pork with barbecue sauce and pickles for $2.99, is available in about 90 restaurants in Michigan and Indiana until July 31. Chicago-area McDonald’s are selling the bacon and cheddar McMuffin. Double-chocolate, blueberry and cranberry-orange muffins, sold in about 1,500 locations, rolled out in April in the Midwest.
The strategy may help Oak Brook, Illinois-based McDonald’s find its next Filet-O-Fish. The sandwich, added to the chain’s national menu in 1965, was created by a Cincinnati franchisee looking to offer fare that the Catholic customers in his community could eat during the religious season of Lent.
Still, adding items makes kitchens more complicated and run more slowly. A swollen menu and too-complex operations are problems that Easterbrook has said he’s trying to remedy. McDonald’s is even testing a slimmed-down drive-thru menu board that lists only the most popular foods.
Another potential hurdle for the locally relevant strategy: Regional fare may confuse and alienate customers looking for the same menu everywhere.
“This is a national brand,” Senatore said. “The most important advantage is that people know what to expect.”
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