Thinking of having a salad for lunch today? If so, you might want to skip McDonald’s. The fast food giant recently announced that it would be discontinuing most of its salad options and focusing instead on its traditional menu of burgers, fries, and milkshakes. Why the change? It comes down to efficiency. Making salads is more complicated than making burgers and in a tight labor market, streamlining production saves on labor. McDonald’s will join other fast food companies that offer more limited menus like In-n-Out, the West Coast chain that offers only a handful of menu choices, and rival Burger King, which took salads off the menu a few months ago.
Over the years, McDonald’s has responded to changing consumer preferences by tweaking its traditional menu to include options like salads, grilled chicken, and yogurt parfaits. Now though, the company is going back to basics, hoping that eliminating menu items with longer prep times will boost profits by reducing labor costs and increasing overall efficiency. The company claims that a more streamlined menu means faster service at the drive-thru window and more sales. One has to wonder though, whether reduced drive-thru lines will come at the expense of expanding waistlines.
Discussion Questions:
1. McDonalds claims that removing items like salads translates into reduced wait times at its drive-thru windows, allowing the company to boost sales volume by serving more customers. Why is efficiency so important for McDonald’s? Explain how even small increases in efficiency can add up to big savings in companies like McDonald’s.
2. Consider the implications of McDonald’s menu changes for the company’s stakeholders. While investors are likely happy with changes that increase profits, how do you think customers and employees will respond?
3. Reflect on McDonald’s strategy of tweaking its menu to respond to consumer demand for more healthy options, and then its decision to eliminate those options. In the long term, do you think maintaining a simplified menu that appeals to a smaller customer base will prove to be more profitable than trying to appeal to a broader audience by offering more options, including those that introduce inefficiencies in the production process? With its reduced menu, does McDonald’s risk alienating future customers or does its ability to serve more customers more quickly make it a more attractive destination?
Sources| Bloomberg: McDonald’s Shrinking Menu Means Healthier Foods Are Vanishing; Fortune: McDonald’s has shuffled menu during the pandemic to save time and simplify operations: parfaits and salads out; CNBC: McDonald’s will keep dozens of items off the menu for the foreseeable future; Unsplash: The golden arches