At McDonald's, A Burger Reckoning

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Wonder if from wondery. I'm David Brown, and this is business wars daily on this December 22. Happy Friday, everybody. Last week, we told you about McDonald's buzzy new concept cosmics. The plans for the new restaurant format were revealed in an investor meeting, and the move marks the first major makeover for the chain in its six decade history. But as it turns out, it's not just a new format that's in the works. At the golden arches, the chain has spent the last seven years tweaking and perfecting its star menu item, the burger. Now those changes are starting to roll out across the US. According to reporting from the Wall Street Journal, patties will now be cooked in smaller batches, allowing them to achieve a more uniform sear. Big Macs will be drenched in even more special sauce. Buns will be more buttery.

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McDonald's revamped burgers marked the chain's biggest menu upgrades in decades. And you might be asking, McDonald's seemed to be doing pretty well. Why fix it if it ain't broke? And you'd be right. The chain is doing well. Quick service restaurants made bank during the Covid-19 pandemic, McDonald's among them. And it's growing faster than its rivals. According to the Journal, same store sales increased more than 10% in 2022. Compare that to 2.2% for Burger King and 3.9% for Wendy's, and you get the picture, right? But while McDonald's is trouncing its quick service rivals, a whole slate of new competition has emerged in the burger market, specifically smash burger, five guys, shake shack. Those burger focused, fast casual chains are growing faster than their traditional quick service counterparts.

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And earlier this year, McDonald's came in 13th among us chains, based on the number of recent customers calling their burgers desirable, according to research by technomic. Which means that while McDonald's as a whole may be doing fairly well, the item on which it has built its legacy was past due for a refresh. Now that refresh is here. But alas, competition is stiff. McDonald's isn't the only chain revamping its burgers to compete with newer rivals. Red Robin replaced its traditional conveyor belt grills with flat tops this year and began ripening tomatoes in house for improved flavor. The chain also sampled hundreds of buns. As chief executive G. J. Hart told the Journal, quote, I can't even tell you the ungodly amount of buns that went through into making our recipe, end quote. Here's hoping that one of those buns made the cut.

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As customers'options for a quick burger multiply exponentially, both McDonald's and Red Robin are hoping that their continued investment in their signature menu items pay off, and that in a sea of the same old burgers, customers find their new offerings to be rare indeed. From wondery this is business wars daily. I'm your host, David Brown.

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Written and produced by Jessica Yarmoski.

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Our executive producers are Tina Rubio and Marshall Louis.

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