McDonalds to Take a Page from the Chipotle Playbook | 101 KXL

McDonalds to Take a Page from the Chipotle Playbook

Written by Jake Baez on March 11, 2014
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There is a popular misconception that Chipotle restaurants are owned by McDonalds. While they were once an investor in our company, they divested in 2006 and our company went public on the New York Stock Exchange that year.

Source: Chipotle

A fact that is made evident by recent financial statistics posted by both companies. McDonald’s Feb. global same-store sales drop 0.3% in February, with U.S. sales down 1.4%. The fast-food megapower cited “challenging industry dynamics” as well as severe winter weather for the sales drop. The truth is, the times, they are a-changin’. In order to maintain its lead, the clown has to keep up with consumer demands. “Looking ahead, we believe that we are taking the right actions to more clearly align with our customers’ needs and build momentum to drive long-term profitable growth,” says CFO Pete Benson.

Businesses like Chipotle or Five Guys however are making strides in customizable and accommodating choices for consumers. Chipotle specifically posted a 9.3% sales gain in 2013. This is due to its fast-casual recipe of letting users pick what they like a-la Subway, but also due to solid choices like adding sofritas (Tofu-based meat alternative) to the menu nationwide. The customizability is key, “It’s one of the biggest trends,” says Andy Brennan, an analyst with IBISWorld. executive vice president of food industry research and consultancy Technomic, Darren Tristano states, “consumers have been looking for greater variety and customization…this is something that many fast-food restaurants have figured out but McDonald’s is just starting.”

Another power that Chipotle wields with reckless abandon is it’s strong focus on high quality, recognizable, natural ingredients, says Tristano. “Customers really respond to this.”

McDonalds is attempting to accommodate by adding things like apple slices to the Happy Meal selection in 2011, and soon to implement salad and fresh fruit instead of fries. In a recent attempt to demystify it’s chicken nuggets, McDonalds released a video detailing nugget production. This video is in response to the popular pink goop image that has been circulating around the web for some time, claiming that McD nuggets were made of Mechanically Separated Meat.

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