McDonald's sees simpler menu as key in turnaround

McDonald's is betting that a slimmed-down menu and a push toward greater customization will help it reverse a troubling decline in sales in the US.
The fast-food giant aims to simplify the dining experience after concluding that a proliferation of menu offerings slowed service and confused customers.
McDonald's wants to get back to "where a customer can come in and understand very quickly what the order is," said chief executive Don Thompson.
The chain will eliminate eight product offerings and trim its number of meal combinations from 16 to 11. It will cut products that are less popular and take more time to prepare.
McDonald's will keep the "Big Mac" and other mainstays, but trim the number of "wraps" from three to one and cull from its multitude of sauces.
Eliminating the menu marginalia "makes it easier on the ordering process and makes it easier on fulfillment when a person is putting that order together," Thompson said.
The plan, dubbed the "experience of the future," follows news this week that McDonald's global sales fell 2.2 percent in November, with US sales tumbling 4.6 percent.
The fast-food giant has suffered amid rising concerns about obesity and other health ills associated with the type of nutrition it offers.
At the same time, competition is fierce and growing, not only from conventional rivals like Burger King and Wendy's, but also from smaller chains like Chipotle, which touts better-quality ingredients and an emphasis on customization of its burritos and other offerings.
- More choice, higher prices -
To address changing consumer tastes, McDonald's is unveiling "Create Your Taste" options at 2,000 of its 14,000 US restaurants that will permit customers to make choices on buns, cheese and toppings.
Mike Andres, president of McDonald's USA, described customization as a strategy for long-term growth.
"One of the beauties of this Create Your Taste idea... is that we don't need to have a big menu board to offer variety," he said.
"The variety is really determined by the customer themselves individually, independently. We can offer these high-quality ingredients made any way."
McDonald's garners 80 percent of its sales from a "very small" number of products, Andres said. The aim will be to leverage these menu staples and boost sales of the most popular items with customization.
During this week's meeting, McDonald's took Wall Street analysts to a "Create Your Taste" restaurant near its headquarters in Oak Brook, Illinois.
Bank of America called the Oak Brook site "impressive," but expressed caution at the lofty $4.69 price point for a customized hamburger.
The product "adds a premium burger option to McDonald's. Price and wait time for the product are high by McDonald's standards," Bank of America said.
"It is unclear how much demand there is for this upgraded experience at McDonald's."
Barclays described McDonald's overall turnaround strategy as "exciting," praising the plans on streamlining the menu and offering customization.
It also welcomed other ideas to create a customer loyalty program through digital technology and to grant greater latitude on menu decisions at the regional level in the massive US market.
But there will be "no quick fix" in performance, Barclays predicted.