Is there a larger constant in the world than McDonald's (MCD) ? If you're trying to eat right, probably. But even then, the massive number of McDonald's near you and the constant barrage of marketing campaigns mean that it's entirely possible you've never gone a day without being reminded of McDonald's.
It's that level of ubiquity that has kept McDonald's a must-own stock. The first quarter of 2018 was sluggish for the fast food giant to be certain, but it's weathered far worse storms before. Many analysts have attributed the decline to the new $1, $2, $3 value menu, which hasn't taken off quite yet. It may be affecting other simultaneous promotions.
This combination of promotions and menu additions may not be giving McDonald's the numbers it's looking for, but don't expect them to stop anytime soon. A lot of the success of McDonald's can be attributed to how often it tries new things. It's not going to work all the time, but if it wasn't for trying something new, you might not have your favorite McDonald's menu item. Without a failed first attempt at nuggets, we might not have McNuggets. Without a seemingly random promotion coming out at just the right time, we might not have McDonald's Monopoly, now a success for decades.
Trial and error has brought McDonald's some great triumphs - but some decisions really make you stress the word error.
5 Surprisingly Successful McDonald's Menu Items
The greatest successes of the McDonald's menu are, unsurprisingly, the first things you associate with the brand. The Big Mac, the fries, the quintessential classic McDonald's order. But you already knew that. Here are some popular items, past and present, that may surprise you.
1. All Day Breakfast
Perhaps you recall when people were demanding McDonald's bring all-day breakfast right; you may have been one of those people. In October of 2015, the company listened and brought it back out and returned the breakfast menu to its 24/7 glory.
Some may have worried about whether the sales could ever live up to the hype, but the promotion helped spark a big 2016 for the company. And as sales started to lag in late 2016 and early 2017, they smartly rolled out an expansion of the all-day breakfast. Analysts attributed this decision as playing a significant role in helping turn the first quarter of 2017 around; considering the McGriddle and Egg McMuffin were already two of their highest selling items, it makes sense that this would work out.
2. Premium Salads
Surprising, yes? Sales aren't exactly what they used to be - CEO Don Thompson in 2013 said salads make up 2-3% of sales in the U.S. - but the premium salad has been a continued moneymaker for McDonald's. At it's best, they sold over 170 million premium salads in 2004 and 2005 in the midst of a health food craze. They're not reaching those heights again anytime soon, but with the relative lack of expense salads cost to make, combined with the premium price, you'd be hard-pressed to call them a failure even now. Some of them are so densely caloric that it's basically like eating a burger anyway.
3. Snack Wrap
Part of what has helped McDonald's last so long is that even items no longer on the menu could be successes. Just ask the snack wrap. It was recently taken off the menu to make room for other promotions like all-day breakfast, but don't let that fool you; the snack wrap was a massive hit right out of the gate in the mid-2000s. Sales demolished early projections, and the company raked in profits. Even when the expanded McWrap was phased off of menus (to the outcry of many a McDonald's fan) it wasn't about profits; they were simply taking too much time to make. With its popularity, don't be surprised if one of these days they bring it back as a promotional item.
McDonald's coffee is a classic. But there was concern that their expanded McCafe would be little more than a second-rate Starbucks and would suffer as a result. But its affordable prices, combined with its natural pairing with the beloved McDonald's breakfast menu, helped make it a hit, one of the reasons McDonald's had such a profitable 2017. More people, it seems, are making McDonald's their first stop in the morning before work.
The Filet-O-Fish may be a punchline for some people, but it's an item that has continued to thrive for over 50 years thanks to some brilliant marketing. In 1962, Cincinnati franchise owner Lou Groen created it so that practicing Roman Catholics, who wouldn't eat meat on Fridays, still had reason to come by for dinner. It was an instant hit, and today it's not only a mainstay for those who refrain from meat but Catholics; to this day, sales of the Filet-O-Fish increase during Lent.
5 McDonald's Menu Items That Failed
The $1 $2 $3 value menu has underwhelmed for sure in its initial stage, but don't fear it too much. It's still early, and there have been far, far worse disasters for McDonald's (Remember when someone found a human tooth?) Here are five failed items you may have forgotten, or maybe you just wish you had.
1. Arch Deluxe
The Arch Deluxe was a burger aimed at adults in the mid-90s, known for its mustard-mayo combination sauce. It failed, despite an astonishing marketing budget of nearly $200 million for it! How could this go so awry? Well, part of that marketing budget went to nationwide commercials where, to prove it was for adults, kids looked at the burger with disgust and revulsion. Decades later, there was talk that McDonald's may be trying to reboot this idea. Maybe this time the ad campaign won't include entire commercials where people look at your food like it's inedible.
2. McLean Deluxe
Though the premium salad succeeded in its launch and continues to this day, in the past McDonald's has struggled to capitalize on healthy trends. The McLean Deluxe was a 1991 burger advertised as having much less fat than the Big Mac. Unfortunately, that fat was replaced with water, and the attempt to bind the new patty together with seaweed extract turned the burger dry and disgusting.
How does a hot dog fail at a burger joint? It seems impossible; it's such a simple and classic idea. But consumers were not willing to associate McDonald's with hot dogs. Perhaps blame Ray Kroc, the businessman who made McDonald's what it was. When he was around, he made sure McDonald's didn't have hot dogs, as he found them disgusting and of a lower quality. Years after his passing, they finally rolled out hot dogs, but few people seemed interested in the idea anymore, and they're not sold outside of a few international markets anymore.
4. Italian Food
Though a couple of franchises kept making them for years after, McDonald's pizza is now a relic of the early 1990s, an expensive attempt to switch things up that did not last long in the U.S. They never sold well enough to keep them on the menu, took forever to make, and the expenses required to put pizza ovens in the kitchens made it a pricey failure. And if people didn't want pizza, they certainly didn't want spaghetti - and they definitely didn't want to eat something called McSpaghetti. This was at least less of a failure than the pizza though; not only did it not require expensive new equipment, but it's actually still served in the Philippines.
Of course, mediocre pasta as a failure doesn't compare with a worldwide PR disaster. Such is the story of the McAfrika, a burger on a pita they tried to sell in Norway in 2002. One small problem: at the time, many in Africa were facing terrible starvation, and people found the burger tremendously insensitive, especially with how well Norway was doing financially. It was a major marketing blunder. The only thing that could've made it worse is if they had tried to do it again - which they did, in 2008.
That is something for investors to consider next time they see McDonald's stock taking a downturn. If your shares can survive them trying the McAfrika twice, they'll survive just about anything.