McDonald's exploring changes to Dollar Menu

Rollout could happen this year

9/4/2013

NEW YORK  — McDonald’s Corp. says a revamped version of its Dollar Menu that includes items priced at $5 could be launched nationally this year.

The world’s biggest hamburger chain says it has been testing versions of its famous value menu that’s called “Dollar Menu & More” in five markets across the country. The company noted that no official changes have yet been made to its current Dollar Menu, which was introduced more than a decade ago. The independent franchisees that run the company’s more than 14,000 U.S. locations would need to approve the change, said Neil Golden, chief marketing officer for McDonald’s.

Golden said that the results from the tests have been positive and the company is in the process of sharing the information with franchisees. In order to be approved, at least 75 percent of the company’s 180 marketing cooperatives across the country would need to vote for it.

The Dollar Menu & More that was tested has three price points —$1, $2 and $5 or “shareable” items such as 20-piece McNuggets. Another version that was tested has prices of $1, $1.79 and $4.99. The menu includes more chicken items, as well as versions of its burgers that come with an extra beef patty or toppings such as bacon.

Golden declined to provide specifics, but said the menu provided “a broader range of profitability” for restaurants.

McDonald’s conducted the Dollar Menu & More tests in Fresno, Ca.; Albuquerque, N.M.; Columbia, S.C.; the combined market of Hartford, Conn./Springfield, Ma.; and Memphis, Tenn.

The tests come as McDonald’s and other fast-food chains have been trumpeting their value menus amid increased competition and the weak economy. Some analysts have raised concerns that the strategy could eat into profit margins. Wendy’s addressed the issue earlier this year by revamping its 99-cent menu to a “Right Price Right Size” menu, with prices ranging up to around $2.

McDonald’s, based in Oak Brook, Ill., has had to swap out items on its Dollar Menu over the years as costs for ingredients such as beef have climbed. When it was first introduced, for example, the flagship offering on the Dollar Menu was the Big ‘N Tasty, which was made with a quarter-pound beef patty. The most substantial burger on the menu now is the McDouble, which comes with two patties and a slice of cheese.

Last spring, McDonald’s also tried to move customers off the Dollar Menu with its new “Extra Value Menu,” which featured items costing closer to $2. After unsuccessfully trying to promote that menu, however, the company went back to promoting its popular Dollar Menu.

If the new “Dollar Menu & More” is rolled out, Golden said the Extra Value Menu would be retired.