Breakfast promises something new
McDonald’s hasn’t been shy about expressing its issues with breakfast business. The segment represents roughly 25 percent of its sales and has struggled from a daypart stance in recent quarters. Essentially, McDonald’s has sold breakfast products, it just hasn’t sold enough of them during breakfast hours.
In September, McDonald’s expanded its $1 $2 $3 menu offerings with any size coffee for a $1 and adapted two customer favorite breakfast sandwiches at the $1 price point. And something new is coming, Ozan said.
“Soon we'll introduce new breakfast menu items inspired by our customers. A combination of national value, a return to local breakfast deals in new food offerings, the vision is up to win back customers at breakfast,” he said.
Shortly after the call, McDonald's unveiled that fresh breakfast item: Triple Breakfast Stacks—McDonald's first new breakfast sandwiches available nationally since the Egg White Delight McMuffin in 2013. They come with two slices of American cheese between two hot sausage patties, McDonald's said, and topped with Applewood smoked bacon and an egg. Guests can opt for their choice of a toasted McMuffin, buttery and flaky biscuit, or McGriddles cakes. The item is set to hit stores November 1.
"People have been hacking our menu for years—so much so that it’s inspired our new Triple Breakfast Stacks,” McDonald's manager of culinary innovation chef Mike Haracz said. “We love seeing the fun ways our customers and McDonald’s crew have been creating their own takes on our classics."
Added vice president of menu innovation Linda VanGosen: "Our customers have also told us they have been craving a bigger, more filling sandwich option in the mornings. Triple Breakfast Stacks are the latest customer-led menu innovation, and we are proud to share them nationally for a limited time as part of our continued journey to build a better McDonald’s.”
In an effort to regain breakfast share, McDonald’s shifted some of its spend to regional. It’s also letting local co-ops choose which items and what deals are best suited for their markets.
“It continues to be a battleground,” Easterbrook said.
‘The largest construction project in our history’
It is pretty eye-opening how quickly McDonald’s is updating its system to the Experience of the Future designs. The U.S. completed about 1,000 projects in Q3. By the end of 2019, Easterbrook said, McDonald’s expects to complete more than 12,000 restaurants, which would undoubtedly make this the largest construction project McDonald’s has ever undertaken, as the CEO put it.
In 2018 alone, McDonald’s transformed north of 3,000 restaurants and expects to surpass its original target of 4,000 projects, Ozan said. As for how these are performing, and if they’re matching the $6 billion price tag, Easterbrook said, “We are seeing an encouraging response from customers in restaurants where many of these improvements are already completed. This is in line with our experience in other McDonald's markets such as Canada, the U.K., and Italy executed programs several years ago that was similar to the one that U.S. is undertaking now.” There are self-order kiosks in more than 15,000 McDonald’s worldwide.
To glimpse into the future, as McDonald’s hopes to see it, consider that in France, Italy, and Spain, more than half of all international visits are transacted through the kiosk.