McDonald's Corp. said it would let franchisees decide which breakfast items to serve all day, part of an effort to simplify operations as wait times have grown and traffic has stalled.
The burger giant saw sales rise in the U.S. after putting breakfast items on sale all day in 2015, one of its biggest operational changes in years.
But same-store sales in the U.S. have since cooled as competitors improved their breakfast offerings. McDonald's beat same-store sales expectations in the first quarter, in part through more promotions.
“There are more and more people offering breakfast,” Chief Executive Steve Easterbrook told investors last month.
Making Egg McMuffins and hash browns all day alongside Big Macs and McFlurry shakes also complicated restaurant operations, contributing to longer wait times that are now challenging the company's performance, according to analysts. Wait times at McDonald's have grown as the chain has added more toppings to sandwiches and new items to its menu.
D.J. Verploegh, a 25-year-old aide to the disabled, recently left a long drive through line in Oskaloosa, Iowa, to get gas. When he came back the line hadn't moved. “Service is usually pretty slow during the late night, like a crawling pace,” he said.
The more complex operations frustrated some franchisees, who recently formed an association to more effectively push McDonald's to address problems including what they say are unfair directives to renovate stores and expand digital capabilities while sales are slow.
McDonald's has made moves to whittle down its offerings. In April, the company dropped “signature-crafted” hamburgers that since 2017 had allowed customers to customize sandwiches with toppings such as guacamole and Dijon mustard. It also cut the number of items on its late night menu.
The Chicago-based fast-food chain said on Tuesday that U.S. franchisees by this fall will select which breakfast items to offer after the traditional morning service period ends at 10:30 a.m. An operator can't scrap all-day breakfast entirely, the company said.
That will allow franchisees to focus on items most popular in their area and otherwise streamline their operations, McDonald's said. The company also gave franchisees some leeway to select items for discount menus.
The increased flexibility for restaurant operators could create confusion for customers that expect McDonald's offerings to be consistent, said Robert Byrne, senior manager of consumer insights at consulting firm Technomic Inc.
“For the consumer who moves around from Boston to L.A., they might not get that,” he said.
McDonald's said its tests allowing franchisees to set all-day breakfast menus hadn't confused customers.
“This refresh follows a series of tests to improve kitchen execution and the overall experience for customers,” the company said.
McDonald's U.S. comparablestore sales, change from a year earlier
BY HEATHER HADDON