The Wall Street Journal wrote this week that McDonald’s suffered its first drop in monthly same-store sales in nine years. The story cited several reasons, including the usual suspects – a soft economy, economic weakness overseas and renewed competition from rivals like Burger King and especially Wendy’s, each of which saw Q3 same-store sales rise.
After reading the whole story, I had a couple of insights I wanted to share.
First of all, I agree a crummy economy and increased competition are factors – but I’ve never characterized going to McDonald’s as being particularly costly. It makes me wonder if there is something to consumers wanting to make healthier dietary choices, and not associating that with McDonald’s, despite its really good efforts over the last few years to offer those things. I’ve often considered whether a healhier McDonald’s experience is something a consumer could really perceive as core to its brand, after decades of touting billions and billions of burgers served. In other words, an ocean liner doesn’t turn on a dime.
I also wonder whether going to McDonald’s is the event it once was. Back in the day, all Ma and Pa Voss would have to do to get us kids excited was say, "We’re having McDonald’s for supper." Boy, you never saw three kids on their best behavior, doing their chores, not bickering … that’s the powerful effect that brand had on us, in hindsight. Is it the same way today? I don’t have kids, so I can’t be absolutely sure, but I have to think with much more and better competition today than the 1970s, it’s not as easy to create that event status, because that’s what every brand is trying to do.
Finally, there’s innovation, and McDonald’s was once the unquestioned leader in this area: Think Big Mac, Chicken McNuggets, Cheddar Melt, McRib, etc. But innovation wasn’t only in the area of menu items. I remember when Happy Meals first came out and how everybody I knew had to have one, and the toy inside. Games like Monopoly were a huge hit as well. The Wall Street Journal story noted McDonald’s is going to be heavily promoting its new cheddar bacon onion sandwich over the holidays. Last night, I saw a Wendy’s ad on television for its Bacon Portabella Melt, loaded with cheddar. So, which company is being innovative? Hard to tell, and really, how many calories are in both sandwiches …?
Let’s be clear – I am, and will always be, a fan of McDonald’s. If I have a craving for a burger, my first choice is always a Quarter Pounder with Cheese and a small fries at my Streamwood McDonald’s on Irving Park (see photo). I haven’t been to a Burger King or Wendy’s in years. That’s to say I’m pulling for Mickey D’s, but they’ve already won me as a customer, probably because of really good marketing in the 1970s and 1980s.
Winning today’s kids and their parents with true innovations that are also healthy is going to be key to building that same positive brand perception in their minds.