The Lessons McDonald's Can Learn From Chipotle
When McDonald's sold its majority stake in Chipotle nine years ago, the Mexican grill was well known for one thing: You could easily choose what to have on your burrito.
A customizable menu is just one idea McDonald's is testing after two years of same-store sales declines in the U.S. and poor results overseas culminating in the announcement today that Chief Executive Don Thompson will step down on March 1.
It's not the only lesson McDonald's ignored from the chain it helped turn into a powerhouse of the "fast-casual" market credited with pulling customers away from Big Macs and Quarter Pounders.
Here's what else they can learn from Chipotle:
1. Keep it simple
Chipotle’s menu hasn’t changed much since it was founded in 1993. McDonald’s, on the other hand, expanded its menu by 70 percent to about 145 items from 2007 to 2013, causing both confusion among customers and inefficient practices at restaurants. McDonald's has already started culling menu items but still has a long way to go. The addition of McCafe, which is costly to franchisees, is also struggling to attract customers and was the main thing operators said they would eliminate in a recent analyst survey.
2. Keep it fast
Fast food is called that for a reason. A bloated menu at McDonald's has resulted in longer wait times for customers and more mistakes when their orders finally arrive. In early trials of McDonald's Create Your Taste, which offers customizable sandwiches, the average wait time for customers increased to seven minutes. Meanwhile, Chipotle has refined and stuck with a service line that can build customized orders quickly and accurately, allowing its workers to get through more orders during crucial busy hours.
3. Be transparent
Chipotle’s marketing has shifted heavily toward the sustainability of its ingredients in recent years and has largely been successful in attracting customers. McDonald’s—despite the controversies and myths about its food over the years—is only now reacting to consumers’ desire for information about its ingredients through public-relations campaigns and a promise to source sustainable beef.
It's unclear what direction McDonald's will go after current Chief Brand Officer Steve Easterbrook takes the reins in March. But the best way to move forward might be to look back.