Skinner: McDonald's to launch oatmeal, more differentiation

June 2, 2010
As part of its product differentiation strategy, McDonald's will launch oatmeal nationwide in 2011, McDonald's CEO Jim Skinner said. The company has been testing fruit and apple oatmeal with 280 calories and low in fat and sodium.
Skinner shared the company's menu strategy yesterday at the Sanford C. Bernstein Strategic Decisions Conference. The strategy includes a continued focus on promoting the brand's iconic core products while delivering innovative new products to keep its menu relevant.
Successful product innovations include the Third-Pound Angus Burgers and Snack Wraps and on the beverage side, the McCafé line. The beverage line rollout will be complete by July, when smoothies will launch nationwide. Most U.S. stores now feature the new frappes, which continue to exceed expectations.
Beverage sales are up 38 percent year to date as of April, following a 25 percent increase in 2009.
McDonald's president and COO Don Thompson said during the Q&A portion that drip coffee also is an important component of the beverage platform and has been providing strong sales lift. He added that with the right operating platform in place thanks to the McCafé builds out, the company plans to continue to develop new beverage offerings.
Skinner said the company will continue to innovate based on consumer needs as its development process is able to get more creative and act more quickly than in the past.
"We're not hesitating to go after opportunities," he said.
The company is confident in its development process thanks to its extensive consumer research, which today allows the company to "know more about our customers and their needs than at any time in our history," he said.
McDonald's will continue to develop products within its barbell strategy to all the company to manage multiple revenue streams and focus on value, especially as U.S. unemployment remains high and consumers continue to watch their spending.
Service differentiation
McDonald's also is focusing on differentiating its service experience by investing in new technology platforms. The company's goal is to provide "faster, friendlier and more accurate service," Skinner said. New customer order display boards and more user-friendly point-of-sale systems will be an important component in improving speed of service in particular.
The brand's advertising will support the brand's differentiated service.
Restaurant re-imaging
As the company outlined in its most recent quarterly earnings call in April, McDonald's also is concentrated on restaurant modernization. The company is investing $1.2 billion globally to re-image 2,000 stores, including 400 in the United States. The re-imaging to a modern, contemporary design will signal to customers that McDonald's is a relevant and contemporary brand, supported by its emphasis on service.

Topics: Burger/Steak/BBQ , Drive-thru , Financing and capital improvements , Food & Beverage

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