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Yahoo
3 days ago
- Business
- Yahoo
The year McDonald's lost its way
Last year, a McDonald's in Darien, Connecticut, made headlines for charging $18 for a Big Mac combo — a price point that sparked backlash, Reddit rage and a larger conversation about how the country's most iconic fast food chain lost its claim to value. Since 2014, McDonald's has experienced the highest price increases compared to other major chains, with menu prices doubling (100% increase) across popular items, a study from FinanceBuzz found. Fast-forward a decade later, the chain's high menu prices remain a topic of debate, forcing McDonald's CEO Chris Kempczinski to announce that McDonald's would make affordability a priority in 2024 during a Feb. 5 earnings call. McDonald's has been working hard to win back customers who once saw it as the cheapest meal in town — or at least as a reliable bang for their buck. The chain announced a limited-time promo meal that included a choice of either a McChicken, a McDouble or four-piece chicken nuggets, small fries and a small drink — all for just $5. It also introduced a supersized 'Big Arch' burger to its menu, expanded its CosMc's locations, revamped its Happy Meal Boo Buckets and added a new, limited-edition McFlurry flavor to its U.S. lineup. But the brand's attempts at buzz couldn't fully drown out the blowback. In October, McDonald's faced a major setback after it found itself at the center of an E. coli outbreak linked to slivered onions in its Quarter Pounders. Fourth-quarter sales at McDonald's locations open for at least one year subsequently fell 1.4% in the United States, CNN reported in February. As pressure mounted online and in the press, executives began speaking more directly about the issue. Our performance in 2024 did not meet our expectations,' Kempczinski told analysts at the time. 'It was a big year, and at times it felt like McDonald's was part of almost every major news story, reflecting the reach and visibility of our brand.' The chain quickly did damage control, launching a $100 million marketing campaign and aiding affected franchisees that have lost business. But even a $100 million PR blitz couldn't fully shake the public sense that McDonald's has lost the plot. Amongst consumers, their main complaint with the chain remains its egregiously high menu prices. On Reddit, one McDonald's patron based in South Carolina said they paid an extra three dollars for two breakfast burritos. And in a report published in The Street, Daniel Kline wrote that a 10-piece Chicken McNuggets meal (which came with fries and a drink) at a McDonald's in Bradley Airport came out to be a little over $20. 'Now, everyone knows that airport restaurants face higher costs, but this markup seemed excessive,' Kline said. 'The same combo, ordered through Uber Eats (which often costs more than an in-store order), cost $10.49 in Port St. Lucie, Fla. 'The airport price was nearly double the cost, which does not reflect well on McDonald's and make[s] you wonder whether the chain should offer some sort [of] standard pricing nationwide.'During McDonald's first-quarter earnings call in May, Kempczinski explained that pricing is 'an inherently local decision' that's 'informed by the trading area that exists around each of our individual restaurants.' 'And our commitment and the focus is, we need to make sure that relative to the trading area that we're competing in that we're offering strong value, and that's what shows up on both the menu board and that also shows up with the promotions and digital offers that we're running,' he added. Kempczinski said McDonald's won't be enacting uniform pricing, but the company will be offering more value-focused meals for inflation-weary consumers. 'I think our franchisees also recognize how important it is for us to stay disciplined on this, and we look at pass-through rates, as I described earlier, to make sure that we understand the consumers' willingness to accept any pricing,' he said. In addition to pricing, McDonald's food quality has been a concern amongst consumers, many of whom allege that there's been an overall decline in recent years. Several have taken issue with the chain's McFlurry, expressing disappointment with its 'distinct chemical sweetness taste that is truly off-putting,' per one Reddit user. Others took issue with McDonald's Snack Wrap, which was revived earlier this month. 'Chicken isn't even bigger [than] my finger,' wrote another Reddit user, who posted a sad photo of a Snack Wrap with a measly amount of filling. 'I paid for a wrap, lettuce and ranch dressing.' The post The year McDonald's lost its way appeared first on Sign in to access your portfolio
Fast Company
3 days ago
- Business
- Fast Company
McDonald's is mining its CosMc's menu to bring new drinks to its restaurants
McDonald's ended its drive-thru-only all-drinks-and-snacks store concept CosMc's in May after less than two years, but the experiment wasn't a waste of time. McDonald's announced that later this summer, it's rolling out a selection of CosMc's drinks with names like the Strawberry Watermelon Refresher and Sprite Lunar Splash to 500 McDonald's locations in Colorado, Wisconsin, and other states, with a plan to eventually take them worldwide. 'This first test in the U.S. market is a big step in our global direction,' McDonald's beverage category lead Charlie Newberger said in a statement. CosMc's launched as a concept restaurant in 2023 with just five locations between Illinois and Texas. The sub-brand was a play for Gen Z consumers and an attempt to get McDonald's' foot in the door of the speciality beverage category. Gen Z customers are 'turning to cold, flavorful drinks as a go-to treat,' McDonald's chief customer experience and marketing officer of McDonald's USA said in a statement, and with a menu packed with sugary frappés, fruity energy drink, iced teas, and lemonades, CosMc's was designed to lure consumers away from chains like Starbucks, Dutch Bros., and Black Rock Coffee Bar for their drink fix. Taco Bell followed last year with Live Más Café, its own speciality drink store. CosMc's is one of many new store concepts that quick-service restaurants have experimented with in recent years. As the industry has adapted to changing consumer habits, chains have opened mobile-only locations and spin-off brands like KFC's Saucy. While these concepts haven't all taken off, like Starbuck's no-seating pickup stores, which the company announced it will ph a se out by next year, they have provided chains with valuable insights they can fold into the main brand. McDonald's won't be opening any new CosMc's locations, but it doesn't have to. After demonstrating proof of concept for its menu of speciality drinks, the company is prepared to take the bestsellers to hundreds of existing stores before scaling it even further. CosMc's was a test case, not a failure. The early-rate deadline for Fast Company's Most Innovative Companies Awards is Friday, September 5, at 11:59 p.m. PT. Apply today.
Yahoo
24-07-2025
- Business
- Yahoo
McDonald's plans September beverage test at more than 500 locations
You can find original article here Nrn. Subscribe to our free daily Nrn newsletter. McDonald's on Thursday teased a test of new drinks that it plans to initiate at more than 500 locations starting Sept. 2. The test, based on learnings from CosMc's, a spinoff beverage-focused concept that McDonald's launched in late 2023 and then closed in June, will include iced coffee, fruit-flavored 'refreshers,' craft sodas, and energy drinks. McDonald's has been light on details so far, but it said the test would be mostly in Colorado and Wisconsin 'and the surrounding areas.' It released the name of five drinks, without providing further details: Creamy Vanilla Cold Brew, Toasted Vanilla Frappé, Strawberry Watermelon Refresher, Sprite Lunar Splash, and Popping Tropic Refresher. It said the September test would include additional items as well. The quick-service chain said feedback from franchisees and their employees would help it fine-tune aspects of any national rollout, from equipment to execution. McDonald's United States chief marketing and customer experience officer Alyssa Buetikofer said the test is based on learnings from CosMc's. 'This beverage test is rooted in what our U.S. customers have told us they want — bold, craveable flavors and exciting new drink experiences,' she said in a statement. 'These new drinks were developed specifically for the U.S. market, drawing on learnings from CosMc's and tailored to meet the evolving tastes of our fans, especially younger consumers. It's a strategic opportunity to explore menu innovation within the beverage space, while testing how we deliver these experiences operationally. As always, feedback from our customers, field teams, and owner/operators will be essential as we shape the future of beverages at McDonald's U.S.' She added that the timing of the test was not coincidental. 'We're seeing real momentum in beverages, with more people — especially our Gen Z fans — turning to cold, flavorful drinks as a go-to treat,' she said. 'It's a great opportunity for us to meet our U.S. customers' evolving tastes and show up in new moments, like afternoon refreshment or snack breaks.' McDonald's said in its quarterly earnings call in May that it would test more beverages. At the time, CEO Chris Kempczinski said the chain has about 10% of coffee share and even more opportunity in other beverage categories, such as energy drinks. 'We think we can be doing better,' he said. To that end, in March McDonald's announced the creation of global category management teams, including one to focus specifically on beverages and desserts. McDonald's beverage category lead Charlie Newberger said in a statement that the September test was part of the company's broader global beverage strategy. 'We're not just adding drinks to the menu — we're advancing our global beverage platform that fits naturally with how people already enjoy McDonald's,' he said. 'We've got the structure, the tools, and the team to move fast and scale what works. This first test in the U.S. market is a big step in our global direction.' The effort comes as drinks specialists such as Dutch Bros and Swig vastly outperform the foodservice industry as a whole. Additionally, traffic declines at many chains have spurred innovation in snacks and drinks to boost the sales of those customers who are visiting restaurants. Contact Bret Thorn at Related Articles McDonald's will shutter its CosMc's concept Despite a tough Q1, McDonald's has plenty of reason to be confident
