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McDonald's Is Getting Serious About Menu Changes

McDonald's Is Getting Serious About Menu Changes

McDonald's Corporation (NYSE: MCD) announced a major menu change Thursday regarding a staple MickyD's item: the Quarter Pounder. The fast food chain has announced it will make the Quarter Pounder with fresh beef in most stores by mid-2018.

Fresh Start With Fresh Beef?

The company initially tested the fresh beef alternative at 400 stores in Texas and Oklahoma. It's clear McDonald's needs to adapt to the current landscape of consumers demanding better ingredients. The move is part of a multi-turnaround plan launched by CEO Steve Easterbrook to address consumer demands of fresher and simpler food.

“They [are] trying to get people to give them another shot,” said Trip Miller, managing partner at Gullane Capital Partners.

This isn’t the first menu change the company has experimented with, as McDonald's has been testing new coffee items in select stores to boost its McCafé menu with more premium items, an attempt to compete with Starbucks Corporation (NASDAQ: SBUX).

While analysts believe the introduction of fresh beef may boost sales, it likely won’t move the needle the same way the introduction of all-day breakfast did in 2015. There is also the potential that the decision to switch to fresh beef will alter cooking routines that could ultimately slow service.

The proposed changes are encouraging for the company, however, as the company is not stuck in their ways and has displayed it is addressing issues head on. McDonald’s U.S. restaurant traffic has fallen for four straight years, losing 500 million transactions.

Despite the lost transactions, McDonald’s stock continues to perform well, with shares just shy of 52-week highs at $129.19.

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