McDonald's To Shrink Menu: Why Less Is More For The World's Largest Fast-Food Chain

on May 21 2013 12:17 PM

McDonald's According to a recent email obtained by Bloomberg News, the world’s largest fast-food chain might be considering scaling back some of its less popular offerings.  Reuters

For years, McDonald’s (NYSE: MCD) has prided itself on its wide variety of offerings, from the Snack Wraps to McSkillet Burritos and even the famous McRibb sandwich. In total McDonald’s has about 145 menu items in the U.S., up from about 85 in 2007. But according to a recent email obtained by Bloomberg News, the world’s largest fast-food chain might be considering scaling back some of its less popular offerings.

While the email reportedly indicates that McDonald’s will cut ties with menu items such as the Caesar salad, the McSkillet Burrito and the Southern Style Biscuit, the Illinois-based burger chain has already halted selling its Angus burgers, Fruit & Walnut salads, and Chicken Selects.

The slimming down of the Mickey D’s menu is an apparent response to a significant slowdown in restaurant service.

"It's gotten to the point where the operation has kind of broken down and that's all a symptom of the complication of the menu," Richard Adams, a San Diego-based restaurant franchise consultant and former McDonald's store owner, told Convenience Store News. "They can't make food fast enough."

Fast-food experts look at contrasting restaurant models like Chipotle Mexican Grill Inc. and attribute the chain’s success to the simplicity of its menu.

"Part of the reason why Chipotle works so well is that it's simple," Peter Saleh, an analyst at Telsey Advisory Group in New York, told Bloomberg. If they added four more items, it would screw up the entire process."

Another theory that many food professionals have raised is that, in terms of consumer behavior, maybe less is, in fact, more.

In one landmark experiment conducted by two college students in a grocery store in California, researchers set up a sampling table with a display of jams. In the first test they offered an array of 24 different jams to taste; on a different day they displayed just six. Shoppers who took part in the sampling were rewarded with a discount voucher to buy any jam of the same brand in the store. It turned out that more shoppers stopped at the display when there were 24 jams. But when it came to buying afterward, 30 percent of those who stopped at the six-jam table went on to purchase a jar, compared to 3 percent of those who were faced with the selection of 24.

In conclusion, Sheena Iyengar of Columbia University and Mark Lepper of Stanford found that too much choice is demotivating.

“The research definitely indicates that when people have too many options, they buy less,” Barry Schwartz, author of “The Paradox of Choice: Why More Is Less,” said in an interview.

While Schwartz goes on to suggest that some companies tend to reduce options in an effort to save money in production, a recent Associated Press report indicates that the rising cost of beef played a factor in McDonald's decision to rid its menu of the Angus Third Pounder. The burger was among the most expensive items on the fast-food giant's menu and will be replaced by three new Quarter Pounder burgers that come in two of the same varieties as the Angus burgers -- Bacon and Cheese, Deluxe and Habanero Ranch.

Despite McDonald's move to limit its options, Schwartz remains optimistic, saying that companies who choose this route usually expect to lose sales, but always end up gaining sales.

“This strikes me as another instance of that,” Schwartz said. “It’s probably cheaper for them to maintain a smaller menu, but they’ll also probably sell more.”

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