McDonald’s premium sirloin burgers are a flop.
“Our Sirloin Burger didn’t meet our sales expectations,” McDonald’s spokeswoman Lisa McComb told Business Insider.
The burgers, made with 100% sirloin, feature the biggest meat patties on McDonald’s menu. They are served on wooden boards meant to signify their premium quality, along with fancy toppings like grilled mushrooms, white cheddar cheese, and peppercorn sauce.
The failure of the pricier sirloin burger could be a troubling sign at a time when McDonald’s, facing seven straight quarters of US sales declines, is repositioning its brand around more premium offerings.
For example, the chain is expanding its “Create Your Taste” test in the US, which allows people to customise their orders using touchscreen kiosks with more upscale ingredients such as applewood smoked bacon and caramelised grilled onions.
McComb says the sirloin burger and “Create Your Taste” can’t be compared, however.
“The Create Your Taste test is very different, therefore not comparable,” she said. “Customers can personalise their sandwich by stacking their quarter pound burger with their choice of premium ingredients, so it’s based off of the current quarter pound burger.”
McDonald’s has also introduced a new Artisan Grilled Chicken with fewer hard-to-pronounce ingredients and reintroduced Premium Chicken Selects, which cost $US2.99 for a three-piece order, compared with $US1.99 for a four-piece Chicken McNugget order.
The Premium Chicken Selects are made from whole pieces of chicken tenderloin that are breaded and fried, whereas McNuggets are made from ground chicken meat.
“All of this fits in with McDonald’s attempts to improve itself — to be essentially a better McDonald’s than it has been as of late,” former Janney Capital Markets analyst Mark Kalinowski wrote in research note in April.
Some critics have expressed concerns about whether McDonald’s core customers can afford these pricier, more premium products.
“Their value perception is totally confused,” former McDonald’s global CMO Larry Light told Business Insider in a previous interview. “They seem to want the customer they don’t have more than they want the customer they do have.”
McComb said she couldn’t determine whether price was a factor in the sirloin burger’s performance.
“Since many factors go into an LTO offering such as the sirloin burger, I can’t speculate on one factor,” she said.
Even if they failed to meet sales expectations, the sirloin burgers did at least succeed at improving Americans’ perception of McDonald’s, according to the company.
“This sandwich represents action steps the [McDonald’s] US has taken to enhance food quality perceptions,” McComb said. “76% of customers who tried the Sirloin Burger enjoyed the taste and said their opinion and perception of McDonald’s beef improved.”
Improving quality is key for McDonald’s right now, according to Bob Derrington the senior restaurant analyst for Wunderlich Securities.
“The food McDonald’s serves gets a lot of low scores from a lot of different rating agencies …They built a business on convenience and value,” he said in an interview with CNBC’s “Closing Bell.”
But McDonald’s needs to do more than change customers’ perceptions — they need more people to actually buy their food.
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