Reporter's Notebook

Will customization revitalize McDonald's?

The plan by McDonald’s Corporation to expand its “Create Your Taste” test to 2,000 locations next year is the biggest sign yet that the customization platform will be a major part of the chain’s revitalization strategy heading into 2015.

But some analysts and observers wonder whether that’s the right move.

As the chain prepares to convince the world that Create Your Taste is a big step in the right direction, some wonder whether the company’s efforts would be better spent focusing on speed of service and value.

There’s little question that the effort is bold. It is a major change in the McDonald’s culture, one that slows McDonald’s down and hopes to make the chain a destination for dine-in customers and those that might otherwise choose fast-casual concepts. Customers use touch-screen kiosks to make their own burger or chicken sandwich. They choose the bun and among 17 different toppings like guacamole and chili-lime tortilla strips.

The platform has received positive buzz from those who have used it. My colleague, Lisa Jennings, tried it last month and came away impressed. She called it “a potential game changer.”

John Gordon, a restaurant consultant out of San Diego, also thought it was an admirable attempt. “It’s a nice sandwich,” he said.

But others don’t think this is the right effort for McDonald’s.

“I don’t know if they have the brand credibility to make it work,” Jefferies Analyst Andy Barish said.

McDonald’s has been built on a foundation of speed, convenience and value. Its customers want their food fast and cheap. Create Your Own is neither. It’s not available to drive-thru customers, meaning it’s not available to the roughly two-thirds of McDonald’s diners who are in too much of a hurry to get out of their car.

And the chain has faced mounting concerns that its menu has grown too bloated after a decade of adding products and dayparts to add sales. That effort has worked wonders for the brand, adding about $1 million in revenue per unit. But now franchisees are complaining that their stores are too difficult to run and service is slowing down as a result.

Richard Adams, a former McDonald's franchisee turned consultant who has been pushing menu simplification, said the customization effort runs counter to efforts to make the brand easier to operate. “They say they want to simplify operations and simplify the menu,” Adams said. “But they also want to do customization. That’s two different directions.” 

Over the years, McDonald’s has struggled with premium items. Its Angus Burger line and its Mighty Wings were both greeted with excitement yet both were disappointments. Create Your Taste is another effort at the premium crowd.

Barish thinks that the brand might be better off refocusing on its core strategies of value, convenience and speed first before adding something as complex as customization. “Clearly McDonald’s menu has gotten crowded,” he said.

It’s important to note that this isn’t the only effort — the chain is still expected to cut some menu items while enabling different geographic zones in the U.S. to pick and choose other items. But pairing menu cuts with a big addition seems contradictory, Barish said. “They’re run dichotomously at McDonald’s these days,” he said.

Yet, said Gordon, the company can’t just cut the menu and expect customers to come rushing back. “I don’t think menu simplification itself is the solution to the customer problems,” he said. “The QSR space now is set up that you do need new product introduction.”

And there is also a general sense that McDonald’s has to swing for the fences after a terrible 2014. The 4.6-percent same-store sales decline in November is notably bad considering the context — it came with gas prices starkly lower and employment considerably higher.

“It was not pretty, that’s for sure,” Barish said. “The company is searching for an answer.” 

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