Wednesday, October 22, 2014

Want to know where McDonald's customer are Migrating?

McDonald’s doldrums are creating customer count declines directly correlated to the decline in the number of dollar menu offerings priced at $1.00 according to Foodservice Solutions® Grocerant Guru™ Steven Johnson.  Our field studies continually reveal that the undercurrents of QSR customer migration are grounded in competitive pricing and value offers from non-traditional fresh fast food outlets including C-stores.

The dollar menu and more positioning has proven to be a challenge for McDonalds.  While blaming speed of service, to many menu items offered, and complexity are all real issues.  The simple fact is the price, value, and service equilibrium is not in disarray rather it is under attack

The in fact Bloomberg reported that “McDonald’s famous Dollar Menu now includes items that cost more than $1, and other items are creeping above $5. At some McDonald’s locations in Chicago’s Loop, a Double Quarter Pounder with cheese, fries and a drink totals about $7.50. Chicken Club sandwiches are $4.45, $4.99 and $5.19 at different Chicago McDonald’s restaurants, without sides or a beverage.”

Still an Aspirational

With 49 Million Americans still receiving food assistance via the SNAP program Foodservice Solutions® filed research shows that McDonald’s is still the number one aspirational restaurant brand or consumers receiving SNAP benefits. Yes, McDonald’s is an aspirational brand. Do not doubt it. 

So, where are McDonald’s customers migrating too?  Papa Murphy’s where they can utilize SNAP benefits to buy fresh prepared Heat-N-Eat pizza for one.  Secondly to 7-Eleven where mix and match menu offers are sub one dollar on some items, creating a value position that is strong and driving top line growth, new store counts, and bottom line profits. 

Stuck in the Middle

McDonald’s high end customers those spending between $6.25 and $7.50 per order are migrating to Panera Bread, Chipotle Mexican Grill, and Chili’s enticed with competitively priced promotions. This customer count decline is more about price than speed of service.  It has become a example of a company stuck in the middle of the market getting attacked at both ends.

More and more grocery stores delis are offering a lunch and dinner specials that are priced below lunch or dinner specials offered my QSR’s and Fast Casual restaurants.  Even more important the grocery stores offerings empower consumer choice with interactive participatory touch points that drive engagement.

We all know what happens when a company gets stuck in the middle.  McDonald’s is not in the middle but is misplaced, mispositioned, mispriced.  Customer count growth will drive long term success for any food retailer that can garner customers today rather than capitulate them. .  Integrating Foodservice Solutions® 5 P’s of food marketing into long term strategy not just tactics will drive customer count growth.

Are you trapped doing what you have always done and doing it the same way?  Interested in learning how Foodservice Solutions 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participationdifferentiation and individualization?  Email us at: or visit: for more information

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