In one other move to restore itself to its erstwhile position, McDonald’s Corp. MCD is making changes in the process of cooking burgers – the most popular item offered by the company. McDonald’s Chief Executive Officer Steve Easterbrook at the Bernstein's Strategic Decisions Conference in New York said , the chain would heat its buns five seconds longer, thus making the bread 15 degrees warmer. Also, the company is changing the way it sears and grills its beef, thereby making its patties juicier.
Steve said” "It's these little things that add up to big differences for our customers". He also stated that the change is a part of its commitment to offer "tastier food across the menu." This move comes after the burger giant announced a turnaround plan, which included business restructuring and financial updates earlier this month. (Read: Will McDonald's' Woes End with Turnaround Plans?)
However, per the media reports, this is not the first time that McDonald’s is modifying the way it toasts its burgers. In the 1990s, the chain stopped toasting buns altogether and opted to microwave its burgers to improve speed. But this did not work well. In 1997, the company installed toasting equipment for approximately $7,000 per location.
Also, during the conference, the company stated that it would no more report its monthly sales data after June, when it is scheduled to declare sales for the month of May 2015.
We believe that altering recipes and menu as per consumers’ preference is the need of the hour as the company is posting sluggish comps consistently over the past few months. This Zacks Rank #3 (Hold) company is leaving no stone unturned to win back its customers. Besides customizing burgers, the company recently announced that it plans to stop selling chicken raised with antibiotics over the next two years. Also, the company is reportedly planning to add kale to its menu this year keeping in mind its health conscious consumers. With a number of other initiatives in the pipeline, we need to wait and see when the company succeeds in posting a turnaround.
Stocks to Consider
Some better-ranked stocks in the restaurant industry include BJ's Restaurants, Inc. BJRI, Restaurant Brands International Inc. QSR and Ruby Tuesday, Inc. RT. All these stocks sport a Zacks Rank #1 (Strong Buy).
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