It’s not news that McDonald’s’ sales have been slipping in the last couple years. For five consecutive quarters the fast-food giant has reported losses, and is projected to close more stores than it opens this year for the first time in at least 40 years. Now, Mickey D’s is hoping to turn its financials around by tapping into something that Americans already knew – we love having breakfast all day.
The test began at select stores in the San Diego area in April, and results warranted a larger, more national rollout. Starting October 6, McDonald’s will offer breakfast all day, only months after testing the idea in a number of their stores. The all-day sale of Egg McMuffins alone may boost sales by as much as 2.5% per year. It’s considered McDonald’s biggest rollout since its McCafe line in 2009, McDonald’s USA President Mike Andres told the Wall Street Journal.
Turning Up the Heat
If you’ve ever been to a McDonald’s at around 10:30 a.m or 11:00 a.m., it can be a real downer when a teller announces that the breakfast menu is no longer available. I always found breakfast hours at major chains like McDonald’s to be an odd and arbitrary period, although the cutoff was due to differing workloads in the kitchen and grill space. Customers have been clamoring for all-day breakfast. It’s a challenge to prepare breakfast items, burgers, chicken nuggets, and McWraps all at the same time.
However, the people asked, and the Golden Arches will deliver. However, the company is balancing two conflicting objectives, according to CNBC. One one hand, unhappy franchisees want to cull the menu, while new offerings are important to boosting sales. Menu innovation and new flavors especially appeal to Millennials, and McDonald’s is certainly paying attention to 120,000 tweets asking for all-day breakfast.
The Golden Goose for the Golden Arches?
It will be interesting to see how much all-day breakfast affects McDonald’s profits in the coming quarters. However, to say that all-day breakfast is McDonald’s long-awaited golden goose might be premature. It will really come down to store-level execution and customer service.
For instance, during the height of lunch traffic, will a store be able to get an Egg McMuffin out the drive-thru window as quickly as a cheeseburger? Will franchisees quickly report issue with their new equipment, including a dedicated egg griddle and a toaster exclusively for the McMuffins?
McDonald’s is banking on success, considering it will cost between $500 and $5,000 for each franchise to make these changes with corporate’s help, CNN Money reported. With 14,300 U.S. stores, it’s no small investment, and as the article points out, CEO Steve Easterbrook offered few details on how to improve food quality and enhance brand image.
The only way to improve brand image is to be diligent about operational processes at the store level. McDonald’s and franchisees need to roll up their sleeves and get crackin’, not only on eggs but also on communication to work out the minor kinks—and there will be plenty, as expected in any major product rollout.