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The Wall Street Journal this morning has a story about how McDonald's is "rethinking “legacy beliefs," and trying to compete more effectively with "better burger" chains that have challenged the fast feeder's traditional supremacy, which has been built on speed and low cost.

According to the story, "a 'sensory' panel is helping McDonald’s refocus on flavor, and the company is testing using fresh instead of frozen beef, different cooking techniques and an ordering system for made-to-order, customized burgers." But experience hasn't been a particularly good teacher in this regard, since McDonald's recent attempts to sell a higher quality burger at higher prices have not been successful.

"The challenges are clear," the Journal writes. "McDonald’s, the quintessential fast-food chain, gets nearly 70% of its U.S. business through the drive-through. Burgers are usually made in advance and held in warming cabinets so they are ready when customers pull up. McDonald’s said its goal for delivery time, from when the order is placed to when it is delivered to the customer, is a mere 90 seconds." And burgers remain the sweet spot for the business, generating one-fifth of all the company's sales.

The story notes that Burger King seems to have stabilized its business by focusing on lower end products, while Wendy's has managed to more successfully "play in an area between fast food and the high-cost better-burger segment with slightly more expensive burgers."

But McDonald's legacy - cheap burgers served fast - seems to be working against its ability to appeal to millennials, who seem to find the likes of Five Guys and Shake Shack more appetizing.
KC's View:
It is almost as if McDonald's is trying to get 10 pounds of flour into a five-pound bag ... its image is running headlong into reality, and the result just isn't fueling growth and millennial appeal. I don't think that McDonald's is in any danger of turning into Howard Johnson's, but then again, Howard Johnson's probably didn't heed the warning signs, either.

I'm not sure if it is possible, but it seems to me that what McDonald's needs is that one, big, trendy, game-changing product ... some burger that just grabs consumer attention because it tastes so good that people start turning into the Golden Arches to buy it. It has to knock people's socks off ... perhaps equivalent to what the Big Mac did for the company when it was introduced nationally in 1968.

Meanwhile ... I anxiously await the opening of a new Shake Shack within walking distance of my house. I would not be nearly as excited if it were going to be a McDonald's.