New nuggets fuel growth for McDonald's
Oct. 25, 2016
by Monica Watrous
Search for similar articles by keyword: [McDonalds
McDonald's sales accelerated following the introduction of Chicken McNuggets with no preservatives.
OAK BROOK, Ill. — Sales at McDonald’s restaurants in the United States accelerated in the recent quarter following the introduction of Chicken McNuggets with no artificial preservatives, said Steve Easterbrook, president and CEO.
|Steve Easterbrook, president and CEO of McDonald's
“Following the announcement, sales of McNuggets increased nearly 10 percent, and they are sustaining above previous levels,” Easterbrook said during an Oct. 21 earnings call with financial analysts.
In addition to removing artificial preservatives from Chicken McNuggets, McDonald’s also announced a transition to chicken not treated with antibiotics important to human medicine and new hamburger buns that do not contain high-fructose corn syrup.
McDonald's also introduced new hamburger buns that do not contain high-fructose corn syrup.
“Customer perceptions of McDonald’s have steadily improved over the past 18 months, and the third quarter marks five consecutive quarters of comparable sales growth across all business segments, with many markets gaining share,” Easterbrook said.
Still, the company remains cautious of near-term headwinds, “most notably in the US as we lapped the very successful introduction of All Day Breakfast, which was immediately popular with customers,” Easterbrook noted. “However, we’re not managing the business quarter by quarter. In fact our commitment to investing in the business is stronger now than ever. We’ve taken action in the areas that matter most to customers.”
McDonald's recently launched the second phase of All Day Breakfast with an expanded menu that includes muffins and biscuits as well as McGriddles sandwiches.
To sustain momentum in the US market, McDonald’s recently launched the second phase of All Day Breakfast with an expanded menu that includes muffins and biscuits as well as McGriddle sandwiches. The company also has introduced digital menu boards in more than 90 percent of US restaurants.
“These new menu boards enable us to showcase the quality of our food with fresh photography,” Easterbrook said. “Because they’re less congested and better organized the menus now do a better job highlighting the broad range of choices available. The menu boards are also smart. They are built with a robust content management system that we haven’t even begun tapping into yet.
“When fully enabled we’ll be able to adjust what’s featured on the menu based on time of day or even weather conditions. We’ll be more relevant to customers as we remind them about our ice cream cones and McFlurries on a hot summer day or handcrafted hot McCafe beverages if it’s chilly outside and they feel the need to warm up.”
McDonald's smart menu boards will allow adjustment according to weather, such as promoting ice cream when it's hot or hot coffee when it's cold.
Going forward, McDonald’s will continue to emphasize value, focus on food quality and improve operations.
“We’re building for the long term and not getting shaken up by strategy,” Easterbrook said. “We will still fight for market share at local level, we’re going to leverage All Day Breakfast through quarter four into quarter one. We’ve got some exciting promotional activity in quarter one that we’re looking forward to.
“We’re not sitting on our hands here, but at the same time nor are we going to get drawn into a year-on-year comp strategy at all.”