McDonald’s is losing market share in America.
The brand’s sales have been declining as customers seek out fresher options.
Management at McDonald’s is starting to make necessary changes to improve business, according to a recent note by Morgan Stanley.
The brand just announced it would start paring down the overloaded menu.
Morgan Stanley’s analysts describe the biggest issues plaguing the brand — and what McDonald’s is doing to fix them.
1. Menu prices are all over the place.
McDonald’s menu is confusing because it features dollar menu items alongside premium offerings that are too expensive for many customers, according to Morgan Stanley.
“Consumers have therefore been gravitating to the value tier, impacting quality perceptions and average check,” Morgan Stanley’s analysts write.
Bloomberg reported earlier this year that the high prices on items like the Quarter Pounder are driving away McDonald’s key demographic.
McDonald’s is going to be cutting some premium items from the menu and work to offer better value.
2. Management was slow to change.
McDonald’s is a huge corporation, and was too “risk-adverse” to make necessary changes, according to Morgan Stanley.
While competitor Burger King trimmed the menu and offered promotions, McDonald’s continued adding items. Many of these, such as the Mighty Wings, flopped.
McDonald’s is now working to roll out a program that lets customers customise their burgers and chicken sandwiches with toppings.
3. The menu is too complex.
McDonald’s has added 100 new menu items over the past decade, according to the analysts.
This bogged down workers and slowed down operations.
McDonald’s drive-thru wait times are now at an all-time high.
The fast food company will be rolling out pared-down menu in January.
Management is also auditing each menu item and ingredient to see where else it can trim.
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