How big can the McDonald's USA menu get?
Many factors contribute to the growth of McDonald's menu. The top two are:
The business news industry: It's boring trying to write about the restaurant industry. The only interesting hot topics are new products.
Wall Street analysts: An analyst's job is to keep track of the activities of certain companies or entire Industries. That means keeping up with new products or concepts, whether it's automobiles, pharmaceuticals, or farm equipment. It's then the analyst's job to translate these changes into EPS projections.
If a restaurant company fails to impress Wall Street with new products, analysts will report that the headquarters lacks "Menu Innovation." New products are as much to impress Wall Street as they are to attract paying customers.
" McDonald's execs believe menu innovation is the key to turning around their sagging sales—so much so that they mentioned it 14 times during their May earnings call. "...There's a steady flow of menu innovation that goes from now through the end of the year in a number of our markets," CEO Chris Kempczinski said. "...Our expectaion is, as we continue to have more menu innovation...it has a positive impact on baseline, which is sort of the gift that keeps on giving."
2 comments:
"Wall Street" is no longer the only place that analysts work. They are now scattered all over the country. My friend Mark Kalinowski works from his farm in New Jersey. But the term "Wall Street" is still useful, if only as a state of mind.
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The suits in Chicago have fumbled the ball again. The reintroduction of the new snack wraps was quickly followed by a system wide warning that we did not have enough lettuce in the system for our products ! No wonder the stock is trading $27 BELOW its 52 week high! Heads should roll for this, but wont.
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