McDonald’s All-Day Breakfast Menu Not Saving Its Bottom Line
McDonald’s brought its all-day breakfast menu to the nation last year, and it was thought it would help boost the company’s sales.
It appears to have worked along with the new menu options it offered to attract customers that typically don’t eat at the restaurant. During the last quarter of 2015 and into 2016, sales increased significantly. Its success caused many of its food competitors to react, offering all-day breakfast as well. McDonald’s has even expanded its all-day breakfast menu.
However, a look at its recent earnings report and it appears that the All-Day Breakfast effect has very little impact anymore. While it’s still doing the All Day Breakfast menu and now has the McPick promotion, the company’s decline could be contributed to the softening industry growth. Upon the news, McDonald’s stock price dropped.
Does this mean that the All-Day Breakfast idea is fading out?
It’s important to note that the all-day breakfast menu has been very popular and successful, which is a real upsell. Non-morning customers have ordered biscuits and gravy along with chicken and hamburger sandwiches instead of a substitution.
It seems as if all-day breakfast isn’t McDonald’s savior after all. However, the company is facing stiff competition from Chipotle and Panera Bread. McDonald’s tried to eliminate its cheap dollar menu items and increase its prices, but at the cost that people looked elsewhere for better food options with better values.
According to David Palmer, an RBC restaurant analyst, McDonald’s is experiencing negative traffic as it continues to deal with the Dollar Menu deal and high-priced menus for the premium items while competing with restaurants like Chick-fil-A.
Although McDonald’s promotions are bringing in more customers, the company’s sales growth is failing because they’re not buying the most expensive items. The overall consensus is that the company must come up with some new tricks to stay competition with its competitors.