Is McDonald's giving up on wealthier customers?
It may be a sign of the troubles and doubts that have beset McDonald鈥檚 that its desire for a noteworthy jalape艌o burger has been scaled back to the new $2聽Jalape艌o Double聽burger. This addition to the Dollar Menu & More has been spreading to McDonald鈥檚 menus across the South and seems destined to be proclaimed a national product any day now.
Last November the chain had a more ambitious, more 鈥減remium鈥� vision of a spicy line in test. The聽聽line included a Quarter Pounder version, a Premium Chicken version and even Jalape艌o & White Cheddar Cheese McMuffin and Biscuit breakfast sandwiches. But that was just as McDonald鈥檚 was coming to grips with the truth that its menu was overloaded and聽. In the end, the chain didn鈥檛 pull the trigger on a Jalape艌o Kicker launch.
Instead it is rolling out this $2 junior version that resembles the pricier precursor. Marketing materials described the Jalape艌o Kicker Quarter Pounder as having 鈥渃ream cheese sauce, jalape帽o pepper Jack cheese, crunchy jalape帽o crisps, pickled jalape帽o slices, farm fresh tomato and a crisp lettuce leaf.鈥� The new Jalape艌o Double is close (Dollar Menu burgers rarely get lettuce and tomato), described as 鈥渢wo beef patties, white Cheddar cheese, jalapeno a茂oli, and both pickled and crispy jalape艌os. A must have for those of you that like a little kick in your sandwich!鈥�
During last week鈥檚 quarterly conference call with analysts, 鈥渧alue鈥� was the first of four 鈥渇oundational elements鈥� that CEO Don Thompson said the brand is strengthening (the others are operations/service, marketing and simplification). On value he聽聽that McDonald鈥檚 is 鈥渆valuating the relationship between pricing and quality perception across our menu board and that鈥檚 because value is one of our grand pillars. So we must continue to fortify our position within this key consumer attribute.鈥�
McDonald鈥檚 has been leaking customers from higher-income households (Chipotle hardly has a strong inner-city presence). The downgrade from a pricy Jalape艌o Kicker Quarter Pounder to a $2 Jalape艌o Double is an important nod to the budget-conscious diners who continue to be the brand鈥檚 bedrock. That鈥檚 not to say McDonald鈥檚 won鈥檛 try to recapture those who buy premium-price burgers, however. The 鈥渂uild-you-own鈥� customization option it is testing is one such lure to those higher-income diners. In the end, as always, McDonald鈥檚 will try to have something for every subset of its clientele.
