McDonald's tests $1.99 oatmeal

McDonald's tests $1.99 oatmeal

OAK BROOK Ill. McDonald’s is bolstering its breakfast lineup with tests of oatmeal, an item that has proved popular in the morning at rival chains.

The Fruit & Maple Oatmeal, which includes brown sugar, apples, raisins, cranberries and a touch of cream, is being sold all day in McDonald's restaurants in Northern California, Baltimore and Washington, D.C. A company spokeswoman said the oatmeal has been "well-received by customers," but no decisions have been made about rolling out the item nationally.

The trial comes as oatmeal has proven its value as a popular item for the morning daypart, especially at drink specialists looking to chip away at McDonald’s morning dominance, such as Starbucks Coffee, Caribou Coffee and Jamba Juice.

Since its fall 2008 launch, Starbucks’ oatmeal has been a hot seller for the world’s largest coffee chain, so much that Starbucks included the item in its $3.95 breakfast pairings launched one year ago. Caribou rolled out oatmeal in its coffeehouses this January, and Jamba Juice has made oatmeal part of its marketing efforts, offering its steel-cut oatmeal for $1 every Wednesday during January for New Year’s resolution season.

McDonald’s remains aggressive in developing new product lines and choices, and breakfast has been a focal point of late. Late last year, the chain launched the Breakfast Dollar Menu, which includes the Sausage Burrito, Sausage McMuffin, Hash Browns, a small Premium Roast Coffee from the McCafe line, and a Sausage Biscuit.

While McDonald’s same-store sales were up and down the final three months of 2009, chain officials credited the Dollar Menu at breakfast with helping the chain continue to outperform its quick-service peers in the United States. Chief financial officer Peter Bensen told analysts in a January conference call that “it was a relatively low increase we need in transactions in the U.S. from the Dollar Menu at breakfast to be margin-dollar-neutral, and we feel pretty confident we’ll be able to hit that.”

Separately, McDonald’s has begun testing new drinks that could appeal to breakfast consumers and sell across other dayparts. The chain introduced Real Fruit Smoothies at the Winter Olympics in Vancouver and said it hopes to have them in the United States by summer. Also, McDonald’s is testing frappe drinks as an extension of the McCafe premium-coffee menu at about a third of its restaurants nationwide.

Contact Mark Brandau at [email protected] [3].