McDonald's: Digital menu boards support variety
March 10, 2016
by Jeff Gelski
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McDonald’s restaurants in Canada have used the digital menu boards for more than a year and have seen sales increases of 3 percent to 3.5 percent.
BOSTON — Digital menu boards going up inside McDonald’s restaurants in the United States should allow for more flexibility and speed in menu changes.
|Mike Andres, president of McDonald’s USA
“And it now gives us the flexibility to go from two day parts to four to six day parts,” said Mike Andres, president of McDonald’s USA, on March 9 at the UBS Global Consumer Conference in Boston. “So depending on your restaurant, say you have a group of high school students that come in every day, Monday through Friday, at 3 o’clock, you can reposition the menu board to help them buy what you’d like them to buy.
“If you’ve got a product that’s toward the end, you want to be able to push that out. There’s so much flexibility that this offers. Plus, it’s just a better experience for the customer.”
McDonald’s restaurants in Canada have used the digital menu boards for more than a year and have seen sales increases of 3 percent to 3.5 percent, he said. Digital menu boards should be implemented fully in the United States by November.
“So we are expecting to see the same type of impact when we get it deployed in the US,” Andres said.
McDonald’s Corp., Oak Brook, Illinois, has 22 regions in the United States. Product sales fare differently in each region, leading to more menu variation, said Kevin Ozan, CFO of McDonald’s Corp. McDonald’s is testing Chobani yogurt in Southern California. McDonald’s restaurants in New York sell bagels, chicken selects and a third-pounder.
“Those aren’t on the core menu,” Ozan said. “That’s a decision of the local market because they’re selling and they’re contributing to margin . . .”
McRib sells differently around the country, over-indexing at 200 percent in some areas of the country and indexing at less than 50 percent in other areas, he said.
McRib sells differently around the country, over-indexing at 200 percent in some areas of the country and indexing at less than 50 percent in other areas.
McDonald’s now has grids that rate a product based on complexity, margin and customer demand, he said.
“We said, ‘Look, if it’s in that lower left-hand quadrant where it’s got low demand and high complexity and low margin, it comes off (the menu board),’” Ozan said.
|Kevin Ozan, CFO of MCDonald's
Ozan said going to an all-day breakfast menu meant adding essentially about seven products to the menu in the other day parts. The number of products coming down the line could lead to issues, such as at the preparation table. Ozan said a holistic approach is needed, not just removing items that are not selling well.
“We have menu,” he said. “We’re talking about operations simplicity. We’re talking about technology that’s helping us and helping the food people do better. We’re talking about merchandising, training.”