A man drinks a cola and eats a Big Mac at McDonald’s on May 25, 2015 in Cologne, Germany.
Oliver Berg | Visual Alliance | Getty Images
mcdonalds has improved its burgers, but it’s unclear whether sales will increase in the same way.
The fast-food giant has outperformed its competitors in recent quarters, thanks in part to price hikes across its menu and higher-income customers dropping prices on McNuggets and Big Macs. Still, McDonald’s foot traffic in the U.S. fell in the third quarter as lower-income customers cut back on visits.
Analysts expect U.S. same-store sales to grow just 4.4% when the company reports fourth-quarter results on Monday morning, according to Street Account estimates. This clearly lags behind the same-store sales growth rate of 8.1% in the U.S. in the third quarter.
Fast food chains that compete with McDonald’s will face pressure from increased foot traffic this year. Diners won’t put up with the double-digit price hikes that boosted sales last year. Instead, chains have to convince customers that their food and drinks are worth the price and keep them coming back more often.
Join McDonald’s “Best Burger” initiative. Small adjustments to the chain’s burgers result in a noticeably more flavorful product.
“Our goal has always been to improve the quality and flavor and overall food experience of our core barbers, but we believe everyone will be able to… “We wanted to stay true to the flavors we love.”
McDonald’s didn’t change the beef patty itself, but the process of cooking and assembling it. Grilling gives the patties a little more room to breathe while cooking. For extra flavor, cook only six to eight at a time.
Onions are also added before the patties are cooked so that they can absorb their juices. The cooked patty is held at a higher temperature, so the entire burger remains warm by the time it reaches your customer. The cheese melts better, the bun has been upgraded, and the Big Mac has more of its signature sauce.
McDonald’s previous double cheeseburger (left) and “Best Burger” version (right).
Source: Amelia Lucas
“While this is a step in the right direction to improve some of the company’s core products, it also We will remain true to our essence.”
McDonald’s started rolling out its tasty burgers about a year ago, and now they’re finally selling them at all stores nationwide.
Some of the company’s most important international markets, including Australia and Canada, have already introduced Best Burger. Australia and Canada are outperforming some of McDonald’s other big international markets, which could be at least partly due to improved burgers, Kalinowski said.
At McDonald’s investor day in December, CEO Chris Kempczinski said the “Best Burger” will be sold in 70 markets by the end of 2023. The company expects the upgraded burger to be available in nearly every market by the end of 2026.
“With initiatives like Best Burger, we’re making small changes that add up to big differences that our customers are really noticing,” he told investors.
McDonald’s is driving change through a familiar frenemy: Hamburglar, a McDonald’s Land character used in advertising in the 1970s. In markets where “Better Burger” is available, the chain aired television commercials in which the mascot touts the improved taste of its burgers.McDonald’s own Website Now support from Hamburglar is splashed across the homepage.
This change affects all McDonald’s burgers except the Quarter Pounder. The chain already gave its classic menu a unique makeover in 2018, switching from frozen to fresh beef patties. This change allowed McDonald’s to gain market share in the hamburger category for the first time in five years.
But Wall Street is divided on whether Best Burger can drive significant growth.
In a research note last month, Wells Fargo analyst Zachary Fadem cited “Best Burger” as an “upside factor” for McDonald’s in 2024. However, it is still unclear how much of an improvement the company expects from this initiative.
Kalinowski estimates that the changes could increase overall sales by 0.5% in 2024.
“I think the net effect of this is certainly positive, but it’s a little more nuanced,” Kalinowski said.
Others are more skeptical.
“I doubt this will drive traffic,” said Peter Saleh, an analyst at BTIG. “I think this is probably just part of the process of upping your game over time. A lot of these concepts should improve the quality of the food over time.”
But there are some promising early signs that customers want to try the improved burger for themselves.
“Better Burger has increased historical burger transactions by an average of 10%, despite no advertising at the local level until this week,” Loop Capital analyst Alton Stumpf wrote in a note to clients in May. Our officials said that he did so.”
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