A McDonald's Quarter Pounder with Cheese. There's no shortage of good burgers in Chestnut Hill. A string of new restaurants and local staples -- from Iron Hill to McNally's -- good burgers abound. …
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A McDonald's Quarter Pounder with Cheese.There's no shortage of good burgers in Chestnut Hill. A string of new restaurants and local staples -- from Iron Hill to McNally's -- good burgers abound.
This week, McDonald's promised to get into the better burger game and re-introduce 1/3 pound all-Angus burgers to its menu at prices that start at $5. It's a strategy the chain tried before and gave up several years ago, so why try again?
On a rainy Thursday at lunchtime, the Germantown Avenue McDonald's in Chestnut Hill is relatively busy. About 15 people are seated throughout the restaurant. Another 10 or so wait in line for their takeout bags or eat-in trays. The going price of McDonald's signature burger, the Quarter Pounder with Cheese, is about $3.50. Half the items on the menu, however, are in the "Dollar Value Menu," where cheddar onion burgers, McFillets run for less than $2 a pop.
Yet McDonald's isn't raking in the cash. According to its Wall Street Journal profile, as of this writing, the chain's revenue growth was down 21.44 percent on Dec. 14 with sales declines of 7.5 percent on $6.75 billion in revenue. So it's making a lot of money, but not as much as it has in the past.
Yet, demand for burgers, despite a increased awareness of health issues and diet fads in this country, continues to grow. In a Reuters article on rising beef demand, the U.S. still wants its burgers, but they're buying them elsewhere.
Demand for ground beef continues to rise in the United States, where 9 billion servings of burgers were ordered at restaurants and food outlets last year, up 3 percent from 2013, according to U.S. market research group NPD.Gourmet burger chains such as Shake Shack and Habit Restaurants are luring both hungry punters and investors away from the old fast-food chains. Shares in Shake Shack more than doubled on their debut on Jan. 30.
So the question is: Will people seek out $5 burgers -- and extra value meals that cost about $10 -- at McDonald's? Or will they simply look elsewhere, to the trendier chains like Elevation Burger, Shake Shack and Jake's Wayback? McDonald's, I'm afraid, has made its reputation on that dollar value menu and the place to get Happy Meals. It doesn't seem likely that growth of a premium burger business is in its future.
