McDonald’s value menu marks how restaurants are adapting or closing

Date:


McDonald’s rolled out its McValue menu Tuesday, its biggest attempt in years to win back customers put off by high prices. It’s the latest sign of how American restaurants, large and small, are trying to cope with the inflationary shock and a changing consumer base that have hit the industry hard.

Several high-profile eateries declared bankruptcy last year, including national chains Red Lobster and TGI Fridays. Analysts expect more bankruptcies this year.

Why We Wrote This

In the United States, restaurants are trying smaller menus, value pricing, and leaner staff to trim costs as they cope with higher prices and a new generation of diners with different tastes and spending habits than their parents.

But the volatile industry isn’t shrinking; it’s transitioning, experts say. Many restaurants are trying new staffing and menu strategies to cope with inflation pressure as well as changing dining and shopping trends.

Compared with their parents, many millennial and Generation Z diners are more frugal and are consuming less alcohol.

“Restaurants realize that they have to expand outside of the old days of someone knocking on the door and saying, ‘Hello, I have a reservation,’” says Stephen Zagor, a restaurant consultant and professor at Columbia Business School. They have to make food for pickup, open neighborhood pop-up locations, and cater events. “The sales are there,” he adds, “but the sales are coming differently.”

McDonald’s rolled out its McValue menu Tuesday, the fast-food chain’s biggest attempt in years to win back customers put off by high menu prices that have soared 40% since the pandemic.

It’s the latest sign of how American restaurants, large and small, are trying to cope with the inflationary shock and a changing consumer base that have hit the industry hard. Last year, several high-profile eateries declared bankruptcy, including national chains Red Lobster and TGI Fridays.

Through October, that was the fastest rate of failures since the 2020 pandemic year, Bloomberg News reported. Analysts expect more bankruptcies this year.

Why We Wrote This

In the United States, restaurants are trying smaller menus, value pricing, and leaner staff to trim costs as they cope with higher prices and a new generation of diners with different tastes and spending habits than their parents.

Despite the news of bankruptcies and other struggles, this volatile industry isn’t shrinking; it’s transitioning.

Restaurants are experimenting with smaller menus and leaner staff to trim costs as they cope with higher costs and a new generation of diners with different tastes and spending habits than their parents, including less alcohol consumption. Others are paring menu prices with value offerings. McDonald’s, for example, now offers customers buying a sandwich, fries, or a breakfast item to buy a second one for $1 and is allowing franchisees to come up with their own value deals.

“It’s definitely a winners and losers market,” says Andrew Sharpee, partner and managing director at AlixPartners, an international consulting firm.



Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Share post:

Popular

More like this
Related