So McDonalds (MCD) is introducing its first new burger in a long time, called “Angus Third Pounders” .
Will it work? Based on early tests in NY and other test markets, yes it will. The cost of the product will be $4 which is not unreasonable at all for a burger. McDonalds is also going the right direction. Going up the price ladder is easier than coming down.
Look at Starbucks (SBUX), they cannot shake the “expensive” label, no matter how hard they try because for so long, they were and were proud of it because to them it signaled “quality”. Now the consumer has turned as is looking for value and McDonalds is printing profits as they come in the door.
The burger. I think people are really underestimating the potential here. Think about it. Most people like a good burger and $4 is still dramatically cheaper than the $7 -$9 you pay in most chain restaurants for one. Because of that, I am of the opinion that a large swath of current customers are going to give it a spin. Mom and dad can enjoy one while the little kids enjoy the Happy Meal they always want.
From a consumer perspective, this is the perfect thing for them to be doing now. They have expanded the coffee customer base, expanded the healthy offerings, and now they are expanding the base of people who want a burger but also want more than the current cheeseburger fare. Unlike other past unsuccessful roll-outs like when they ventured into pizza, this is perfectly in keeping with what people go to McDonalds for in the first place.
This is going to be big folks…..
Disclosure (“none” means no position):Long MCD, none
One reply on “McDonalds New Burger”
This is hardly a new burger. It has been in SoCal for 2 years. i didn't know it took that long to launch a burger. I love their Mccafe or whatever they call it.