The hype surrounding Mcdonalds’ new all-day breakfast is a direct reflection of western culture. With busy lifestyles and higher than average income, American’s are ready, willing and able to spend their money on fast food; One of America’s favorite dining destinations being McDonald’s. However, with the too-good-to-be-true change the fast food giant has just instilled, there are unintended consequences. McDonald’s is in big trouble.
Economics is not an exact science by any means. It is often hard to tell, predictably so, what the outcome of certain policies or statutes when enforced. Often times, the situation needs to play out for anyone to really observe the benefits or shortcomings of a decision.
In McDonalds’ case, the corporate giant insisted that their market for breakfast foods was so big that they needed to expand, instituting their all-day breakfast to the delight of consumers everywhere. There are immediate negatives, however, for the McDonald’s breakfast-lover. One of these negatives being a location-specific shortened menu with few pre-selected items for sale through non-breakfast related hours of the day. The consumer’s favorite breakfast item from the chain may not be available in their area for all-day dining.
Nevertheless, these tiny negatives pale in comparison to the company’s long-term downfall. With the installation of the new menu, franchisees are panicking. High costs associated with the new plan are sure to make several operators insolvent. Likewise, future franchisee numbers are likely to dwindle to nonexistence. With the company’s growth stagnated, there is only one path. That path is most certainly not towards more growth.
Along with the obvious problems, there are seemingly not-so-obvious drawbacks. Locations are going to see more food go to waste. Additionally, other items are being pushed off the menu. With breakfast foods becoming an everyday staple, these foods are cheaper than regular menu items, leading to a likely decrease in revenue. The increased investment by individual franchisees has led many against the actions of the empire.
Rome wasn’t built in a day, analogous with the empirical growth McDonald’s has seen since its conception. However, one is aware that empires can be destroyed in a day. It is easy to see that McDonald’s is in the latter half of its existence. Follies have seemingly been a part of McDonald’s recent history; They once owned 87% voting power in Chipotle’s stock. In light of past, present and future blunders, I fear the worst for the giant.
Matthew is an Graduate MBA student at Indiana University. He is involved in data analysis, market research, and statistics. He enjoys reading, writing and community involvement.