Has McDonald’s Corporation (NYSE:MCD)’s menu become too big not to fail?
Jason Dean, The Wall Street Journal’s Chicago Bureau Chief, says that the breadth of the fast food giant’s menu may be doing the company more harm than good.
“They’ve added more and more options to the menu to try and entice more and more people to come – people who might not want a Big Mac and fries. But by doing that, they also add complexity and complexity slows the operation down. […] All of that undercuts one of McDonald’s long-lasting core values which is speed. It’s the ‘King of Fast Food’ and you don’t want to be slow when you’re that,” Dean said.
Sara Murray, the reporter hosting the WSJ Live segment and Dean’s partner in the discussion, said that McDonald’s Corporation (NYSE:MCD)’s menu has expanded from nine items in 1948 to 121 items this year.
Dean said that every fast food out there essentially wrestles with expanding their offerings while keeping their operations efficient. The bureau chief noted that rivals such as Burger King Worldwide Inc (NYSE:BKW) has admitted that it once over-extended its menu. McDonald’s Corporation (NYSE:MCD) is not like rival Chipotle Mexican Grill, Inc. (NYSE:CMG), he added, which has essentially three main offerings.
McDonald’s Corporation (NYSE:MCD) has a tough job scaling back its menu, Dean said, while doing other things to grow such as customizing orders more which could also complicate their operations. The company has too many restaurants in the U.S. to rely solely on adding restaurants to substantially grow, Dean said.
Michael Larson’s Bill & Melinda Gates Foundation Trust has a massive stake in McDonald’s Corporation (NYSE:MCD). It owned about 10.87 million shares in the fast food giant by the end of the third quarter of the year.