McDonald's tests custom burger program with drive-thru option

Wed Apr 29, 2015 11:53am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

By Lisa Baertlein

LOS ANGELES, April 29 (Reuters) - McDonald's Corp, working to revive sales in an era of mounting fast-food competition, is testing "TasteCrafted," a more modest version of a new custom sandwich program that will cost franchisees less to install and can be offered through drive-thru windows, an analyst said on Wednesday.

Word of the test, apparently a tweaked version of the McDonald's "Create Your Taste" customization project, lands just before new Chief Executive Steve Easterbrook is scheduled to unveil his corporate turnaround plan on May 4.

McDonald's U.S. sales have slumped due to tough competition from chains ranging from Wendy's Co and Burger King to Chick-fil-A and Chipotle Mexican Grill Inc. But McDonald's own missteps in its top market for profit also have led to large and complicated menus that have slowed down service.

As many as 30 McDonald's restaurants in Central California coastal towns such as Santa Barbara and San Luis Obispo are offering TasteCrafted, which allows diners to choose burgers, sandwiches, McWraps and salads in a variety of "chef inspired flavors," Janney Capital Markets analyst Mark Kalinowski said in a client note.

As many as seven more restaurants in Oregon are also running the test, Kalinowski said.

"The franchisee investment is small.... From what I know, this could be rolled out nationally in a few months, whereas Create Your Taste would take (two to three) years," said one industry source quoted in Kalinowski's note.

Kalinowski and McDonald's did not immediately respond to requests for comment.

The TasteCrafted program offers sandwiches made with beef or chicken, three choices of buns and four different topping flavors: bacon clubhouse, pico guacamole, hot jalapeno and ranch deluxe. The flavor choices for McWraps and salads are southwest and cucumber ranch.

Franchisees have been pushing back against Create Your Taste, a custom sandwich program introduced by McDonald's previous CEO. Create Your Taste is being tested in a handful of U.S. cities and is further along in Australia.

U.S. franchisees have complained that Create Your Taste will exacerbate already slow service due to complicated menus. They also say that the installation price of more than $100,000 per restaurant is not justified, in part because the custom sandwiches are not offered through the drive-thrus that account for more than 60 percent of U.S. restaurant sales. (Reporting by Lisa Baertlein in Los Angeles; Editing by David Gregorio)