Bottom-line menu

Associated Press

OAK BROOK, Ill. – You won’t find McPizza or Arch Deluxe, two forgettable flops from the past, on the grill in test kitchens at McDonald’s corporate headquarters.

But almost anything else is possible these days, a reflection of the menu shake-up under way at the hamburger giant’s 12,700 U.S. restaurants following years of sluggish results from new products.

Burritos, bratwurst, brownie sundaes, Southern breakfast biscuits – all have emerged recently from 1 McDonald’s Plaza for testing – and more surprises are being cooked up for release soon.

Some could become nationwide staples; others will be strictly regional items or wind up on the food obituary list along with the McLean burger and Big Xtra, the latest casualty.

Regardless of the fate of these dishes, industry experts say the push to innovate is probably overdue as McDonald’s tries to improve slowing profit growth in the United States.

This is still your father’s McDonald’s, and founder Ray Kroc’s too – Big Macs, Filet-O-Fish and its trademark fries will remain core items for the world’s largest restaurant chain.

But the fast-food bastion is doing much more experimenting than before.

“We have seven or eight items that are almost icons,” said Tom Ryan, a senior vice president who heads McDonald’s U.S. menu management. “The point isn’t that these are bad or outdated, it’s that we could use a few more.”

Besides new products introduced at select McDonald’s – including the Grilled McVeggie sandwich, three new chicken sandwiches, Fruit ‘N’ Yogurt Parfait, McFlurry dessert and others – another 40-odd ideas are in various stages of testing, he said.

Ryan said success of such new products as breakfast bagel sandwiches and McShaker salads in particular confirms the company’s view of its menu as “an untapped engine of growth.”

It hasn’t always been so.

“McDonald’s has had very little in the way of new products in the past decade – at least new products that have worked,” said analyst Joseph Buckley, who follows the restaurant industry for Bear Stearns. “Other companies have been more aggressive.”

Archrival Burger King developed a new french fry and a Big Mac clone, the Big King, among other items. Wendy’s has scored with a series of limited-time products, the latest the Mozzarella Chicken Supreme sandwich.

Taco Bell has introduced the gordita, the chalupa and new fresh-fried nacho chips, and Pizza Hut and KFC have had a steady stream of new items. All three are owned by Tricon Restaurants International.

“You can be successful without new products, with superior execution,” said Buckley. “But new products are a way to create interest in the brand … a nice add-on to drive sales with.”

First came the bagel sandwich, which Buckley calls McDonald’s best new product in a decade. It began regionally and went nationwide in the spring.

The completed installation of the Made For You cooking system in U.S. restaurants this year enabled the company to quicken its pace of new product introductions – a move that could boost profits and help McDonald’s shake a protracted stock slump. The customized system makes preparing products much faster.

McDonald’s officials say they don’t expect the emergence of a new blockbuster, suggesting it may be impossible in a market that’s much bigger and more developed than in McNuggets days.

“If we happen to find one, that would be great,” said Alan Feldman, head of McDonald’s U.S. business. “A continuous stream of relevant, compelling new product news – that’s what we’re after.”

Industry-watchers endorse that strategy.

“Everybody would like to hit a home run, but it’s a very competitive marketplace,” said Janice Meyer, an analyst for Donaldson, Lufkin &Jenrette. “They’re going for singles and doubles, which at least gets you on base.”

Copyright ©2000 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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