McDonalds Is At It Again

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 only two in ten that you would have learned that there were other factors that contributed to McDonald’s sales increases. 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, and 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.

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. Some franchisees and operators reported unhappy customers complaining that the ads were deliberately misleading by not saying only half the choices were available.

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