Dive Brief:
- McDonald's is the most popular fast food chain among adult consumers who eat fast food at least once a month, according to a new study from UBS Evidence Lab. Consumers seem to have an overall favorable impression of the golden arches, with the brand outperforming competitor restaurants Wendy's, Burger King, Subway, Taco Bell and KFC by a wide margin.
- Most consumers reported a strong preference for McDonald's based on what they perceive to be its good value and promotions. When surveyed about why McDonald's customers don't dine at the chain more often, the predominant answer was spending constraints.
- In a likely bid to resolve this roadblock, McDonald’s is adding budget-friendly deals to its menu to attract more customers, including $1, $2 and $3 meals as well as cheaper breakfast options, according to Business Insider.
Dive Insight:
After reporting nine consecutive quarters of same-store growth, McDonald's isn’t satisfied with its earnings and has now set its sights on making its menus even more attractive to diners with a limited budget. Low-income earners reported less discretionary income in 2017 compared to 10 years ago, which means fewer trips for fast food. Tightening wallets aren't simply a low-income issue these days, either. Only the top 20% of earners in the U.S. reported seeing income gains that allowed them to enjoy looser discretionary spending.
McDonald's has been doing a number of other things to attract customers, including adding international favorites to some of its U.S. menus like the Stroopwafel and making all-day breakfast a reality. It’s looking to increase efficiency and optimize drive-thrus by streamlining its late-night menu. It also recently announced plans to drop its line of premium burgers from menus switching to a line-up of Quarter Pounders instead.
It’s also catering to wealthier consumers by offering a new delivery service nationwide, with McDonald's seeing the average bill size double for online orders compared to in-store orders. Households reporting six-figure incomes are making use of online delivery more frequently than low-income earners, according to Business Insider, meaning that McDonald's may be trying to get ahead of the competition that’s flooding the food delivery space. The chain is reportedly in talks with Uber Eats to renegotiate its U.S., including decreasing the delivery commission, which many franchisees loathe. For some, the commission fees makes food delivery orders through Uber Eats or a similar third-party service a poor proposition.
But it's not alone in switching up its menu to attract customers who are counting their coins. In December, Taco Bell introduced a value menu on top of a vegetarian menu, while other QSRs are betting on plant-based burgers to attract clientele. Burger King also has Whopper Value meals while Wendy's expanded its value menu last year, but these efforts don't seem to be enough to persuade diners away from McDonald's.
