Can Monopoly Save McDonald's This Summer?

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Monopoly is back at McDonald's (MCD). The annual marketing promotion -- in which patrons peel off pieces to win instant food prizes or collect subsets of properties for even bigger prizes -- kicks off on Tuesday.

It couldn't have come at a better time for the fast food giant.

After a decade of steady same-store sales growth, the world's largest restaurant chain surprised investors late last year with its first monthly decline since 2003. There have been a couple of other negative months since last October's dip: Global comps declined in January, February, and April of this year.

Many analysts suggest that sales have been soft because McDonald's is losing sight of the value message that helped propel the chain to the top. McDonald's has responded by reemphasizing its signature Dollar Menu and rolling out more low-priced promotions.

When that's not enough, giving away free food usually seems to do the trick.

Summers Are Slipping Away

If you don't recall last summer's Monopoly promotion it's because it didn't happen. Well, it didn't happen during the summer anyway.

McDonald's kicked off 2012 its game on Sep. 25. It wasn't enough to spare the burger flipper from experiencing a weak October, but advancing the game to mid-July this time around would seem to indicate that there's a desperate tone to drumming up traffic during the seasonal summer lull.

The 2011 contest also kicked off in late September.

Shifting the game's launch should help increase store traffic during the four weeks that it's attaching game pieces to certain menu items. It will be hard to tell if the likely increases in late July and early August will be the result of new initiatives or attributable to the promotion. And if sales are soft again this October, McDonald's will have a scapegoat -- not having the Monopoly promotion around to help beef up sales.

Bringing Order to Franchisees

McDonald's could use the promotional boost.

Analysts see revenue climbing a mere 3 percent this year. Earnings growth should be stronger, but this is also the same company that has missed Wall Street's profit targets in three of its past four quarters.

For years, McDonald's figured that expanding its menu with more healthy and exotic items would help breathe new life into the chain. That hasn't been working, so the chain is asking franchisees to update their stores to include a new dual-point ordering system that should speed up the delivery of orders and also help crack down on the growing number of incorrect orders.

The new system -- with a dedicated runner checking and handing over food -- will also ideally tackle growing complaints of unfriendly employees at the chain.

However, it's not really about McDonald's nabbing a "get out of jail free" card here. The softness in sales since late last year may not be entirely the chain's fault.

The growing popularity of fast casual chains that deliver higher quality food at slightly higher price points -- but without the check retrieval hassles and tipping requirements of traditional casual dining -- have been weighing on both ends of the dining spectrum.

Meanwhile, at the Competition

Speaking of fast casual, it's merely a coincidence that the darling of the niche -- Chipotle Mexican Grill (CMG) -- is also rolling out its own multi-week promotion.

Chipotle introduced Adventurrito, a 20-day promotion where it's awarding a year of free burritos to 20 lucky winners every day, this past weekend. Players at Adventurrito.com have to solve daily puzzles to be eligible for prizes.

The Internet is making it too easy. Folks are already making YouTube comments -- blurting out the correct responses -- on the daily Adventurrito clips. As this week's Monopoly promotion rolls out, you can be sure that several online sources will be out with the names of the rare properties that are the most valuable game pieces.

That's the nature of the Web. (You have to take the good of viral marketing along with the setbacks that come with the seamless spread of information.)

However, at the end of the day, McDonald's has problems that a single four-week game can't fix. There are bigger trends working against McDonald's, and that's something that isn't as easy as advancing to Boardwalk.



Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Chipotle Mexican Grill and McDonald's. The Motley Fool owns shares of Chipotle Mexican Grill and McDonald's.

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22 Comments

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viagrastim

This Mcdonalds Monopoly fan page is giving away free codes daily...
https://www.facebook.com/McdonaldsMonopolyCodes

August 01 2013 at 1:21 AM Report abuse rate up rate down Reply
societytm

seems to me Leo's book recommendation on Sunday involving Stanford and MIT book is what this country could use to "simplify" competitive edge will pledge to pursue!

July 19 2013 at 5:51 PM Report abuse rate up rate down Reply
setanta54s_back

heheeeeeeeeeee
now WE HAVE mikkie D derangement syndrome !

July 17 2013 at 12:17 AM Report abuse rate up rate down Reply
rick mullins

9 times out of 10 food is cold.

July 16 2013 at 4:41 PM Report abuse rate up rate down Reply
nromanscpa

Here in the South, why would I want to eat at a chain where the workers are ~SLOW~ and have an attitude, then get food that is wrong 90% of the time? McD's in Walmarts are particularly disgusting!! Overpriced, cheap food, slow, and yes...flies! Also, they feature toys for the kids, then you get there but they are out of the featured toys or moved on to another type of toy and all I get is a whiny kid in return! I'll personally take 5 Guys and Whataburger any day! Oh and Moe's...

July 16 2013 at 4:01 PM Report abuse -1 rate up rate down Reply
David

I'm not the only one that noticed that McDonalds appears to be biased in it's advertising. There are plenty of Americans of African descent, both male and female, white females and a scattering of Hispanic or Middle Eastern males, but seldom ever a white male. If I had to guess, I guess that the CEO is a prejudiced black male by the way the advertising is run. Perhaps the large white male silent population is doing like I do - avoiding McDonalds. Who wants to eat where they are apparently not wanted?

July 16 2013 at 2:53 PM Report abuse +1 rate up rate down Reply
1 reply to David's comment
setanta54s_back

eh...you've noticed that crap too ?
and for YEARS their mural sized photos depict this bs.

July 17 2013 at 12:21 AM Report abuse rate up rate down Reply
KING BEAR

IT'S TACOS PEOPLE, MEXICAN FOOD , THATS ALL THERE IS HERE NOW.

July 16 2013 at 2:04 PM Report abuse rate up rate down Reply
mdennish

People who eat a lot of fast food must have a death wish.

July 16 2013 at 1:48 PM Report abuse rate up rate down Reply
ccurt61

Where did my comment go?

Typical incompetence from AOL

July 16 2013 at 1:46 PM Report abuse +2 rate up rate down Reply
Mickey

Ordered a Big Mac Meal yesterday. It was between 5 and 6 bucks. What ever happened to value for convenience. Time to stop at a real restaurant.
Sit down have a meal Cooked to order. For maybe a dollar or two more.

July 16 2013 at 11:24 AM Report abuse +4 rate up rate down Reply