McDonald’s Corp came out this week with the announcement that their roll-out of the all-day breakfast in the U.S. has been a resounding success, telling Bloomberg that franchises will have to prepare for the next step in the plan: a new national value plan.
But franchises around the country are telling a very different story. Mark Kalinowski, an analyst for the Japanese finance company Nomura, conducted a survey of 29 franchise owners overseeing 226 different locations in the U.S. and found that all was not happy in McD land after the October 6 breakfast all-day roll-out.
There were complaints about slower service, confusion in the kitchens and lower daily sales as customers went for the lower-priced breakfast menu items. “In small stores, the problems are vast with people falling over each other and equipment jammed in everywhere,” one franchisee wrote in response to Kalinowski’s survey, according to the New York Post.
One franchisee called the rollout plan an “erratic, distorted, disorganized direction from McDonald’s,” while another wrote: “All-day breakfast is a non-starter. We are trading customers down from regular menu to lower-priced breakfast items, not generating new traffic.”
One complaint that all the franchises mentioned was not having a choice between either biscuits or muffins. Apparently, biscuits are only available in the deep south of the U.S. Yep, that’s correct. Not only can southerners get biscuits, but they can get bacon, too. McDonald’s say menu items are based on local preferences, so that makes sense.
States with biscuits with bacon, egg and cheese include Alabama, Louisiana, Georgia, South Carolina, North Carolina, Mississippi, Tennessee and Kentucky. Not only will some states have either McMuffins or biscuits as the only choice, but the overall breakfast menu has been trimmed down a bit.
Third-quarter earnings statement due out next week
After seven straight quarters of declining same-store sales in the U.S., the fast food chain is hoping for the long-sought-after turn-around. The chain has lots of competition, particularly with Wendy’s who came out with its “four-for-$4” promotion this week that includes a Jr. Bacon Cheeseburger, four-piece chicken nuggets, fries and a drink.
McDonald’s shares have gained 9.7 percent this year, with some analysts saying the gains were due to expectations that the new Chief Executive Officer Steve Easterbrook will be able to turn the company around. On Wednesday this week, McDonald’s stock fell less than one percent, closing at $104.82 in New York. McDonald’s has about 14,300 locations in the U.S.
