There’s the Beef
McDonald’s announced on Thursday that their Quarter Pounders would be using fresh beef. Many see this in direct response to their close competitor Wendy’s who touts all their burgers are fresh. In fact Wendy’s even took to Twitter with this tweet:
A little nervous about McDonald’s stealing the PR thunder.
So the funny thing about all of this, McDonald’s move is not in response to the Wendy’s (despite the media all over it here, here, here, you get the picture).
So if not Wendy’s then who?
Enter the Almost Fast Food (AFF) chains. I say almost since most of these places have you take a number and wait for your food to be freshly prepared after ordering. Most of them tout quality prep and ingredients compared to the traditional fast food chains.
So who belongs in AFF? We have In-N-Out, Five Guys, Shake Shack, Whataburger and Smashburger just to name a few.
Over the last 5 years, the growth in this particular niche has been astronomical. Restaurants like Chipotle in the Fast Casual arena forced restauranteurs to disrupt the Fast Food industry as well as customers were seeking out quality but still relatively fast.
The growth has been so strong, Shake Shack IPO’d two years ago. Granted the stock has been sitting around $30 a share since its massive jump to $90 post IPO, the reason there is the heavy competition within AFF chains.
Now we aren’t here to analyze the stock prices and viability of individual companies. McDonald’s sees the long game and it is full of these new players. Local burger joints with great service were always there but when these companies started to venture out of their comfort cities and some cases states, that is when McDonald’s had to make a move.
So for starters McDonald’s plays around with their menu, not to compete with the fast casual, since they made that mistake 4 years ago. For McDonald’s it is time to emulate those AFF chains.
McDonald’s Next is a concept store in Hong Kong that opened up recently that looks suspiciously like one of those AFF chains. Now some of you might be observing some healthy options along that bar there that really doesn’t line up with other AFF competition, more fast casual. However, I feel McDonald’s menu moves here in the US show a strategic shift that didn’t need to be enacted overseas. The look of their restaurants will need to change though if they want to get people walking in. McDonald’s foot traffic has been decreasing for the last four years.
So these strategic moves by McDonald’s to people who haven’t seen the shift from 4 years ago might look like knee jerk reactions to their immediate traditional fast food chain competition. No, this is all about the AFF chains and their mark on consumers. It is a new ballgame for relatively inexpensive dinner and an older dog like McDonald’s has to evolve.
