One of the McDelivery articles we posted last week discussed the advertising of McDelivery.
CEO said, "McDonald’s typically won’t invest in any sort of national marketing campaign
until at least 70 percent of the U.S. system can offer what’s being advertised".
Why is that like McCafe?
OPNAD launched McCafe nationally in April of 2009 when a little more than 60% of U.S. stores had the product. Many major markets did not have McCafe until months after the national launch.
Millions of McDonald's customers were misled and disappointed.
Prior to McCafe 2009 was going pretty well. The year started off nicely with a 1st quarter same-store sales increase of 4.7%. The McCafe OPNAD campaign launched in April The
2nd quarter of 2009 came in at + 3.5%, 3rd quarter +2.5%, and the 4th quarter was barely positive at + 0.1%.
In fact, the years 2003 thru 2012 were all positive same-store sales years but 2009 was the lowest full-year increase of all at +2.4%. No one can claim that OPNAD prematurely advertising McCafe built same store sales.
So advertising a poorly accepted product that was only available in a percentage of stores pretty much ruined sales momentum for 2009. Most of the money OPNAD spent that year
If McDelivery goes on OPNAD U.S. Operators should expect soft or negative same-store
sales for the duration of OPNAD advertising against McDelivery.
McDelivery is different than advertising a new product. It's a service, not a product. I don't recall a time when OPNAD advertised a service. Some markets will benefit, others won't. It makes sense that the New York City area would advertise the service. But, Sioux Falls? Albuquerque? Reno?
And keep in mind, one of the reasons McDonald's management pushes Operators to put something new on national television is to impress investors and analysts. Like McCafe, management has been hyping McDelivery with investors for several years. Once investors
see ads on T.V. it becomes successful in their minds and they raise their expectations for
sales and earnings. All accomplished with McDonald's Operator's advertising $$$.