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With their drive thrus busy, fast-food chains focus on simplicity

Consumers’ shift has chains like McDonald’s and Taco Bell thinking differently, says RB’s The Bottom Line.
Photo courtesy of Taco Bell
Bottom line

The coronavirus has restaurant chains thinking simplicity.

Last week, Taco Bell announced that it is cutting a dozen items from its menu, in part to improve service and potentially leave room for additional innovation down the road.

That announcement followed news from McDonald’s, which is considering the future of its All-Day Breakfast, largely because it is enamored with its sudden improvement with drive-thru times and wondering if that would be better going forward than afternoon McMuffins.

That two of the five largest restaurant chains in the U.S.—three if you count the roast-beef-sandwich-cutting Subway—are willing to cut their menu size is a sign of just how much consumers have changed coming out of the pandemic. None of these three are traditionally known for their simplicity, in fact.

To be sure, menu simplification is a constant issue. One of the most tried and true revitalization techniques is to slash menus. Improved operations and profitability frequently make up for the customers lost when the restaurant drops menu items.

Menu size is a perpetual battle in the franchise world, too, as operators yearn for simplicity while franchise brands push for the royalty-generating revenue that new items can bring.

That debate has long played out in McDonald’s, where operators have wanted a smaller menu, pushing back against the franchisor that wanted to market a new sandwich or beverage lineup.

Franchisees have complained about All-Day Breakfast, for instance, and pushed back almost from the moment the company started that promotion back in 2015. Preparing eggs alongside burgers has significantly increased operational complexity and, they say, contributed to slowing service.

They also say the slow service has played a role in McDonald’s weak, pre-pandemic traffic, and the company has started to agree. Last year it began pushing efforts to improve speed of service.

It also began allowing operators to cut some items from the All-Day Breakfast menu.

In April, McDonald’s cut the menu altogether in a bid to help franchisees with their profits, as well as their service from the drive-thru, which was their only way to generate sales.

Last month, McDonald’s executives acknowledged that the shrunken menu has done wonders for the company’s drive-thru times. And Blake Casper, a McDonald’s franchisee and the chairman of the National Owners Association, said the company was generating drive-thru times “we didn’t know were possible.”

Indeed, fast-food sales have thrived during the pandemic. Sales at quick-service restaurants were up 5% year-over-year in the week ended July 12, according to the data firm Facteus. They have been up year-over-year every week since the second week of May.

Consumers have clearly shifted how they dine at restaurants, and fast-food chains may see these numbers and decide that speed and operational simplicity are more important than menu breadth to get customers.

Diners, in other words, might not be choosing their restaurant based on the products they serve so much as they pick them based on the length of the drive-thru line.

Still, there are risks, as the Taco Bell decision demonstrates. The company’s shrunken menu hit the social media site Reddit and has spurred considerable complaints from customers who loved the chain’s potato-based offerings, in particular.

Taco Bell executives clearly believe, however, that it needs to get customers through the drive-thru more quickly. And they are betting on that simplification for offsetting any potential customer loss with the departure of Cheesy Fiesta Potatoes or Loaded Grillers from its menu.

Menu cuts are not pain-free, of course. But they frequently work, and at a time when almost all of a restaurant’s business is coming through a single window, they are more important than ever.

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