Could the era of nonstop LTOs–limited-time offers–in fast food be coming to a close? The industry’s new trend just might be fewer new things on menus.
In the quick-service restaurant world, the consensus has been that consumers just can’t get enough of limited-time offers like McDonald’s Shamrock Shake, Wendy’s Pretzel Bacon Cheeseburger, and Starbucks’ Pumpkin Spice Latte. In addition to these items being deemed as exciting, new, and/or quirky, the limited-time aspect puts pressure on consumers to act now or risk losing out on their chance at a taste. This psychological gamesmanship is widely credited as the main reason that the McDonald’s McRib is a big hit when it periodically appears on menus for brief moments in time.
There may be signs, however, that some have been pushing the LTO angle too hard. According to the Chicago Tribune, analysts are saying that McDonald’s sales have been stagnant because consumers aren’t responding to the company’s latest innovations–the limited-time menu items that are supposed to serve as magnets for customer dollars.
“New product introductions don’t seem to interest customers anymore,” one McDonald’s franchise owner said in a survey, per a study by Janney analyst Mark Kalinowski. “Maybe we’ve overdone it. It seems we are wasting millions on advertising and getting nothing for it.”
Because it’s much more efficient, and much less expensive, for a company like McDonald’s to focus on making and marketing classic menu items, some fast-food insiders are rethinking the wisdom of trying to develop and sell a never-ending parade of unfamiliar selections.
A Burger Business post that references Kalinowski’s report highlights McDonald’s new Mighty Wings as a likely example of the company trying to do too much with its menu. After testing the wings in various markets, McDonald’s introduced Mighty Wings this fall as a limited-time offer, and if the run was a hit it could mean that wings would make it to the menu permanently. But franchise owners largely report that the wings are just too expensive for all that many customers to bite:
“Hard to sell for $1 per wing when we still have the Dollar Menu,” says one operator. “Pricing seems high when many retailers are offering for as low as 25¢ at happy hour,” says another. “Too expensive for this economy,” is another opinion.
Interestingly, the $1-per-wing pricing looks particularly expensive compared to other items inside the very same McDonald’s restaurant. Thanks to the Dollar Menu, customers can purchases an entire McDouble or McChicken sandwich for the price of a single chicken wing. And while $2.99 buys three wings, a 20-piece of McNuggets is a comparative bargain for just two bucks more ($4.99 at most McDonald’s).
McDonald’s isn’t the only fast-food chain that may be rethinking the strategy of regularly introducing new items and nonstop limited-time offer rollouts. According to Nation’s Restaurant News, in a recent conference call discussing Domino’s Pizza’s third-quarter results, CEO Patrick Doyle said that the company planned on shifting the emphasis away from a steady stream new products. Instead, Domino’s would refocus on better service—in particular, faster and easier ordering via the web, as promoted in a series of new ads.
“We’ve still got a very good pipeline out there, but we’re not in the ‘product of the month club’ anymore,” said Doyle. “We’re building momentum by focusing on fewer, bigger things that truly enhance the experience for the customers.”