Let's Take A Closer Look

Explaining complicated subject matter simply since 1986.

Earlier this year the big news for McDonald’s was how their newly-introduced All-Day Breakfast was drawing new customers and increasing profits. If you read any of these articles, the chances were slim that you would have learned that there were other factors that contributed to McDonald’s sales increases because only two articles out of the dozens I read mentioned them.

Here is a partial list. You many be able to think of others.

  • customers returning to all fast food chains in substantial numbers,
  • raising prices,
  • cutting costs,
  • improving drive-through times,
  • heavy advertising and promotion,
  • more media coverage,
  • reward redeemers,
  • a new app,
  • novelty,
  • unseasonably warm weather,
  • cheap gasoline, strong demand in China,
  • Chipotle’s e-coli outbreak.

So McDonald’s 5.7% increase in same-store sales is not the result of just one thing. It can only be explained by some combination of a dozen factors. And because each has some measurable effect, only a small part of that 5.7% increase is explained by the All-Day Breakfast menu. The fuller story is in the math, which is quite simple. If 12 factors contributed equally to a 5.7% increase, then each would only contribute less than one half of one percent each.

But that doesn’t fit the turnaround success story McDonald’s wants to tell.

Their press agents and publicists provide news sources with company-written narratives which to no one’s surprise accentuate the positive. For a Bing Crosby/Bette Midler stage version of the 1944 classic, click here.

Only a few of the articles went deeper than the press releases by pointing out some of the problems caused by All-Day Breakfast, another story McDonald’s is not interested in telling.They include:

  • increased organizational complexity,
  • slower service,
  • larger payrolls,
  • crowded kitchens,
  • cannibalization of higher-priced lunch and dinner items,
  • misleading advertising,
  • and one other issue not generally known*.

*The All-Day Breakfast menu offered only 12 of the regular breakfast menu’s 24 items. Many franchisees and operators reported unhappy customers were angry that McDonald’s ads were deliberately misleading by not saying half the things they wanted to order were available.

Eight months later, McDonald’s started showing new television ads saying that they’ve expanded the All-Day Breakfast menu.

Enter your email address to subscribe to this blog and receive notifications of new posts by email.