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A customer orders food from a drive-thru menu is at a McDonald's restaurant in Encinitas, California July 21, 2008. McDonald's, the world's biggest restaurant chain, reports second-quarter earnings later this week. Investors will be looking for how the company is controlling rising commodity prices. REUTERS/Mike Blake (UNITED STATES) - RTR20EH3
Reuters/Mike Blake
Too much choice.
DITCH THE MCWRAP

Which eight menu items will McDonald’s kill in the US?

Facing dismal sales numbers around the world, McDonald’s is in the midst of a major transformation of its management structures and food. The company revealed this week that it will offer customized burgers, conduct a massive review of its ingredients and cooking methods, and axe eight menu items and five “Extra Value Meals” from an increasingly bloated list.

Don’t worry, the Big Mac, chicken nuggets, and french fries aren’t going anywhere soon. And breakfast, which is performing well with its extensive menu of 16 items, seems an unlikely candidate for pruning. But newer items with less of an established fan base may be on the chopping block.

“I think the future suggests that we can continue to really simplify our base menu and we all recognize that 80% of our sales are coming from a very small subset of the menu,” McDonald’s US President Michael Andres said at an investor meeting Wednesday.

The company has added nearly 40 different menu items (paywall) to its US menu over the last seven years, creating a more complex preparation process and increases in customer service complaints. A shorter menu has been tested in six cities, and has already reduced drive-through wait times, according to Andres.

So which menu items are soon to go the way of the McPizza, the McDLT, and the McSalad Shaker? Here are some top candidates—as well as one that is less likely to disappear, but probably should.

Minor burger variations

Last year, the company rolled out three new Quarter Pounders: the Bacon Habanero Ranch, Bacon and Cheese, and Deluxe versions. They don’t appear to be a hit. A JP Morgan analysis after a sitdown with executives this week mentions them pretty derisively: ”Premium products need to be much, much better executed than previous ‘1/3 pound angus’ or the equally as uninteresting ‘quarter pounder flavors,'” analyst John Ivankoe’s team wrote.

These variations on the chain’s classic seem likely to go because the company is releasing a new, customizable version of the Quarter Pounder in stores. Some of the same toppings might be available as customization options, but with the recent explosion of burger options—as many as 15 in some markets—there’s plenty of fat to cut.

Dollar menu rationalization

The Dollar Menu—a roster of items available for $1—has also grown steadily larger. And instead of acting as a loss leader, drawing in customers who then spend elsewhere on the menu, it seems to be undercutting the demand for combo meals and other pricier items. The Dollar Menu also ensures that more people judge McDonald’s by its cheapest items, hurting perceptions of the chain’s food quality.

From CFO Steven Bensen at last month’s Morgan Stanley retail conference:

We are actually taking a pretty hard look at our pricing structure as we speak. Years of anchoring the menu around $1 price point, as commodities and labor costs have increased over the years, have caused us to probably disproportionately share those cost increases with some of our core menu items, creating a bigger disparity between the price of those and the prices some of our entry-level value items.

Cutting the Dollar Menu down—perhaps by removing small variations on sandwiches like the Bacon McDouble, Grilled Onion Cheddar Burger, or Buffalo Ranch McChicken that emulate premium items—might help.

The incredibly redundant Double Cheeseburger

There is a difference between a McDonald’s Double Cheeseburger and the McDouble: It’s one slice of cheese, and about 10 cents. One of those sandwiches seems a decent candidate to go.

Give up on the McWrap

This is an unlikely idea, but worth considering. There are exactly eight Premium McWraps on the menu, if you count both grilled and fried chicken options.

They’re complicated and take a really long time to make; they haven’t been selling well (paywall); and they require a different kind of wrapper (an elaborate cardboard sleeve) which means waste.

Rolling them out was a big bet and investment for the company, which desperately wants to attract younger and more health-conscious consumers. And they’re only a little over a year old. But it might be time to accept the sunk-cost fallacy and just move on. (There are seven smaller snack wraps that seem prime for elimination as well.)

If saving preparation time is the priority, this is the option that makes the most sense, even if means less of a draw for health-conscious consumers. Perhaps McDonald’s isn’t the place for them anyhow.

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