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McDonald's tries Dollar Menu at breakfast to wake up sales
August 26, 2009
Chicago area McDonald's have added a breakfast Dollar Menu to combat slumping morning sales, following the lead of a similar offer in the Seattle market, according to a story in Crain's Chicago Business. The local discounted menu includes sausage biscuit, sausage McMuffin, medium coffee, two hot cakes, two hash browns and fruit-and-yogurt parfait. The sausage sandwiches previously sold for around $2.
While other quick-serve chains from Burger King to Jack in the Box have reported negative U.S. same-store sales, McDonald's continues to post positive comps in the United States, although not as strong as last year. U.S. July comps were up 2.6 percentcompared to 6.7 percent last year, with the company crediting its McCafe coffees as part of the uplift.
But, according to Crain's, the new drinks have not generated large sales increases. U.S. comps for restaurants open at least 13 months were up 1.8 percent in June and 2.8 percent in May, but a large part of that growth can be attributed to across-the-menu price hikes in the last year. Breakfast sales also are hurting across the QSR segment.
Market research firm The NPD Group reports that for the year ending May 2009, QSR morning meal traffic was flat while sales were up 3 percent over the prior year with average check size $3.87.
From Crain's Chicago Business:
Breakfast sales were growing at a 6 percent annual rate a few years ago."Breakfast sales are declining, and the only growth that we have had in the last two years has been based on price and not demand," Steve Plotkin, head of McDonald's Western division, wrote in a memo to franchisees last month.In a separate memo, Mr. Plotkin told franchisees that "the launch of Dollar Menu at breakfast has given the (Northwest) region a lift."He encouraged franchisees to look for ways to offer value at breakfast and find ways to sell more food.
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