McDonald’s, the fast-food giant, has been making headlines in recent quarters for outperforming its rivals in terms of sales growth. However, the company faces the challenge of sustaining its momentum, especially as low-income diners have cut back on their visits. To address this issue and drive more frequent visits, McDonald’s has launched the “Best Burger” initiative, which involves small tweaks to the chain’s burgers to create a more flavorful product. While the changes have received positive feedback, there is uncertainty about whether they will lead to significant sales growth.
The “Best Burger” initiative focuses on enhancing the quality, flavor, and overall eating experience of McDonald’s core burgers without compromising on their familiar taste. The changes primarily revolve around the cooking and assembly processes. The patties are cooked with more breathing room on the grill, resulting in a more flavorful burger. Only six patties are cooked at a time, allowing them to retain their juices. Onions are added before cooking to absorb the patty’s juices, further enhancing the taste. The cooked patties are kept hotter to ensure a warm burger when it reaches the customer. Other improvements include better-melted cheese, upgraded buns, and more special sauce for Big Macs.
McDonald’s started implementing the better-tasting burgers approximately a year ago, but it has now launched them at all locations nationwide. Key international markets, such as Australia and Canada, have already witnessed the effects of the burger improvements, outperforming other major markets. McDonald’s plans to expand the initiative to 70 markets by the end of 2023 and expects nearly all of its markets to serve the upgraded burgers by 2026. The company believes that these small changes will make a noticeable difference to customers’ dining experiences.
To raise awareness about the upgraded burgers, McDonald’s is leveraging the Hamburglar, a McDonaldland character featured in its ads since the 1970s. In markets where the “Better Burger” is available, the chain aired a TV commercial featuring the mascot endorsing the improved taste. McDonald’s website also prominently displays an endorsement from the Hamburglar. These marketing efforts aim to attract customers’ attention and generate interest in trying the enhanced burgers.
The Impact on Sales Growth
Opinions on the potential impact of the “Best Burger” initiative on sales growth are mixed. Some analysts, like Wells Fargo’s Zachary Fadem, see it as an “upside driver” for McDonald’s in 2024. Others, like BTIG’s Peter Saleh, are more skeptical and believe that improving food quality is an ongoing process for fast-food chains. Analyst Mark Kalinowski estimates that the changes could contribute to a 0.5% increase in overall sales by 2024.
Customer Response
While the full impact of the upgraded burgers on sales growth remains uncertain, there are promising signs that customers are interested in trying them. According to Loop Capital analyst Alton Stump, despite minimal advertising at the local level, the “Better Burger” has already led to a 10% lift in burger transactions on average. This suggests that customers are responding positively to the improved taste and may be willing to visit McDonald’s more frequently as a result.
McDonald’s “Best Burger” initiative aims to enhance the quality and flavor of the chain’s core burgers while staying true to their familiar taste. These small changes to the cooking and assembly processes are intended to create a more flavorful and satisfying dining experience for customers. While the impact on sales growth is uncertain, initial signs indicate positive customer response. Whether this initiative will drive significant sales growth and sustain McDonald’s competitive edge in the fast-food industry remains to be seen.
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