A menu of Big Macs and Quarter Pounders must not be enough to drive the growth that McDonald's Corp. (NYSE: MCD) hoped for, or planned for, in the People's Republic. The huge fast-food chain has decided targeting local tastes will be one key to adding customers. That, in turn, means adding rice-based products for consumers.
The People's Daily reported on McDonald's menu changes:
With an eye on dinner tables in the Chinese mainland, McDonald's, the world's leading fast food operator, on Wednesday announced new rice products for the mainland market.
Starting from June 10, the new products, including chicken and beef rice wraps, will be sold in all 1,700 McDonald's restaurants on the Chinese mainland.The core menu, including the chain's staples like the Big Mac and McChicken, will not be changed, Kenneth Chan, chief executive officer of McDonald's China, said in the press release."
Our new dining options are examples of how McDonald's innovates to bring more options to our Chinese customers, because that's what they want," Chan said.
The decision is a clever way to counter the success of Yum! Brands Inc.'s (NYSE: YUM) KFC, which has taken the Chinese market by storm. Recently, issues with the quality of its chicken products has blunted that progress, but the KFC brand is powerful enough to overcome that eventually. McDonald's also has to deal with a rise in the number of Starbucks Corp. (NASDAQ: SBUX) outlets in China, and the growth of Subway, which has more stores than any other fast-food company in the world.
McDonald's has decided that one menu does not fit all. That is despite the temptation to assume that what sells in the United States will be popular elsewhere. That in temptation would be based on the assumption that McDonald's food is better than any other, no matter what the locations of its stores. A marketing plan based on common, universal tastes is arrogant. And it is a path to losing market share in China, and likely elsewhere.
In addition to the intelligent work McDonald's has done in China to increase its customer base, it has added options, rice-based meals, that do not have hundreds of calories and tons of fat. That, by itself, has advantages.
Filed under: 24/7 Wall St. Wire, China Tagged: featured, MCD, SBUX, YUM