McDonald’s Pushing Meat as Salads Fail to Lure Diners
Even with such names as Bacon Ranch and Southwest with Crispy Chicken, salads make up 2 percent to 3 percent of U.S. restaurant sales, Chief Executive Officer Don Thompson said today at an investor conference. By contrast, the Dollar Menu generates 13 percent to 14 percent of sales, he said.
“I don’t see salads as being a major growth driver in the near future,” Thompson said at the Sanford C. Bernstein & Co. Strategic Decisions Conference in New York.
Instead of advertising salads, the Oak Brook, Illinois-based company may push hamburgers and chicken sandwiches, said Thompson, who added that there are other ways to sell more fruits and vegetables. For example, some of the chain’s new McWraps have tomato and cucumber slices, as well as shredded lettuce.
“People talk healthy and basically in a fast-food setting they disregard it,” said Bob Goldin, executive vice president at researcher Technomic Inc. in Chicago. “Consumers like the traditional favorites -- burgers, chicken sandwiches.”
Americans are also concerned with value now and the salads are relatively expensive at McDonald’s, he said. “We’re all trying to stretch our dollars.”
The world’s largest restaurant chain is struggling to revamp its menu and draw customers from competitors after failing to introduce enough new products last year. McDonald’s, which has about 14,100 U.S. locations, is also trying to introduce such lower-calorie options as egg-white sandwiches, as Americans try to eat healthier.
Burger King Worldwide Inc. (BKW) recently started selling turkey and veggie burgers. Wendy’s Co. is also pushing new and healthier items; today the company announced it’s bringing back its 460-calorie berry almond chicken salad topped with strawberries and blueberries.
McDonald’s first added tossed salads to its U.S. menu in 1987. Bloomberg News reported earlier this month that the fast-food chain has considered getting rid of Caesar salads -- the variety with crispy chicken has 350 calories, compared with 600 calories for a Quarter Pounder with bacon and cheese. The company removed Fruit & Walnut salads from its menu this year.
David Palmer, an analyst at UBS AG in New York, today lowered his full-year profit forecast for McDonald’s because of a “modestly worse” European consumer environment and greater foreign currency headwinds.
The shares fell 2.2 percent to $99.05 at the close in New York for the biggest drop since Oct. 19. The shares have gained 12 percent this year, while the Standard & Poor’s 500 Index has advanced 16 percent.
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