McDonald’s Corporation (MCD): Chicken Wings To The Rescue?

In late 2012, Dow-30 component McDonald’s Corporation (NYSE:MCD) reported that comparable store sales declined for the first time in nearly a decade. The market didn’t take kindly to the news. What has the company done about it, however, is the real question to ask. First off it went back to basics, second, and more importantly, it continues to innovate. The most recent effort? Chicken wings! But will chicken wings really save the day?

The Problem

After spending some time lost in the wilderness, McDonald’s got its stride back about the same time its growth trend in comparable store sales took hold. It proceeded to go on a streak of industry domination that has been nothing short of impressive, built largely on product innovation. However, trends like this can’t go on forever. Management eventually misses the mark.

A global economic meltdown, followed by a weak recovery, was one stumbling block. Resurgent competition from the likes of Yum! Brands, Inc. (NYSE:YUM), which owns such fast food icons as KFC, Pizza Hut, and Taco Bell, and a newly christened Burger King (BKW), back as a public company after yet another restructuring attempt, was another. And, new fast food concepts that offer slightly higher quality fare, like Chipotle Mexican Grill (CMG), giving consumers a totally new food option, was a third.

Not a Leader for Nothing

That said, McDonald’s isn’t an industry leader for nothing. It seems to be getting back on track with its same store sales results. However, a key change it plans to make is to start offering more limited time specialty items. This will likely mean more test products that may or may not make sense at a fast food burger joint.

However, product innovation has been a key to the company’s success and testing is an integral part of new product development. A test of chicken wings that has expanded from Atlanta to Chicago gives a hint at what might be on the menu at the local McDonald’s soon.

Chicken Wings…

Chicken wings are an increasingly popular food option. Yum brands, which has incorporated Wing Street into many of its Pizza Hut locations, is one such example of a fast food giant trying to expand into this space. And, of course, KFC has wings. Then there is the wildly popular Buffalo Wild Wings (NASDAQ:BWLD). The shares of this company, which, as its name implies, specializes in wings, have been on an upward climb for years.