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McDonald’s looks to the Big Mac for sales growth

Nation's Restaurant News - Wed, 2017-01-18 22:09

McDonald’s Corp. is going big with the Big Mac this year.

The Oak Brook, Ill.-based burger giant this week introduced two new sizes of its signature Big Mac — a rare line extension for the chain’s signature sandwich.

Meanwhile, McDonald’s said on Twitter that it plans to reveal a surprise next Thursday. It’s uncertain what that surprise will be, but it appears to be related to the chain’s Big Mac promotion.

From way up here, those numbers kinda look like… an awesome surprise that’ll be unveiled soon. Who’s got a guess?pic.twitter.com/WYwNE3PoWH

— McDonald's (@McDonalds) January 17, 2017

The bigger Grand Mac includes two patties totaling a third of a pound of beef. It costs around $5 and has nearly 900 calories. The sandwich weighs about 11 ounces in total and is roughly larger than a softball.

The smaller Mac Jr. is designed for customers who want an easy-to-hold version of the Big Mac. It costs about $3, has one patty and is 480 calories. Both sandwiches have lettuce, onions, pickles, Big Mac sauce and a sesame seed bun.

The new Big Mac sizes signal a return to new-product news for McDonald’s after an 18-month hiatus — its last new product LTO was the Third Pound Burgers in 2015. Last year, the chain focused much of its marketing on all-day breakfast and value deals, while leaving much of the innovation up to different regions.

The offer also signals a major change in thinking at McDonald’s headquarters. Outside of a brief foray into a Mac Snack Wrap that ended in 2010, McDonald’s has largely avoided any extensions of the Big Mac in the U.S. — despite news from competitors like Burger King, which is using its Whopper as a new product format.

Last year McDonald’s tested Big Macs featuring sauce laced with Sriracha in Ohio.

McDonald’s hopes the Big Mac promotion can be a shot in the arm early this year as it seeks to regain some momentum it has lost in recent months. Same-store sales in the U.S. slowed to 1.3 percent in the third quarter, and some analysts expect that number to turn negative in the fourth quarter as the chain laps a strong fourth quarter of 2015.

Mark Kalinowski, analyst with Instinet, said in a note Wednesday morning that he expects McDonald’s same-store sales to fall 1.2 percent, based on a survey with franchisees. He also expects same-store sales to fall 1.9 percent in the first quarter of this year, in which the chain also runs up against difficult comparisons from the same period in 2016. 

But one operator told Kalinowski that the Big Mac promotion “should be a winner,” and expects the chain’s $1 coffee promotion to generate traffic. 

Investor expectations appear to be increasing when it comes to McDonald’s. The company’s stock has risen more than 10 percent since early November. 

McDonald’s has signaled a willingness to do more to promote its core menu items in the past two years, and the Big Mac is central to that core. It is arguably the most well known sandwich in the restaurant industry, one so prevalent across the world that the magazine The Economist uses it as an index to measure the strength of different countries’ currencies.

Franchisee Jim Delligatti, eager to get McDonald’s to develop a bigger sandwich, started serving the Big Mac in 1967. Sales took off. McDonald’s expanded the sandwich nationwide, and it has remained on the menu ever since.

Contact Jonathan Maze at jonathan.maze@penton.com

Follow him on Twitter: @jonathanmaze

Report: Chuck E. Cheese’s parent in IPO talks

Nation's Restaurant News - Wed, 2017-01-18 19:57

According to a Reuters report, CEC Entertainment Inc., parent to the Chuck E. Cheese’s and Peter Piper Pizza child-oriented chains, is in talks for an initial public offering in the last half of this year. 

Irving, Texas-based CEC, which was taken private in 2014 through a $1.3 billion deal with Apollo Global Management LLC, has talked with banks but not yet hired underwriters, Reuters reported Tuesday. Sources said the IPO could value the company at more than $1 billion.

A CEC Entertainment spokeswoman said Wednesday that she had nothing to add to the reports.

Chuck E. Cheese’s has been expanding its menu items geared toward adults and increased value offerings in order to build frequency, said Thomas Leverton, CEC CEO, in an interview last June. 

“We’ve spent a lot of time working on mom and dad and that veto [vote],” Leverton said. “Your average kid who comes to Chuck E. wants to come 11 times a year; they come three times a year. The difference between that and the 11 times a year they want to come is the mom and dad veto.” 

Chuck E. Cheese’s is also modernizing by phasing out game tokens for computer-chip tap-to-play cards at its popular arcade-style games. 

CEC Entertainment owns the similar entertainment and dining brand Peter Piper Pizza, the 147-unit company it acquired in October 2014 from ACON Investments LLC.

In Securities and Exchange Commission filings for the third quarter ended Oct. 2, CEC Entertainment reported revenues or $223.7 million, up from $217 million in the prior-year quarter. The company narrowed its net loss to $2.4 million from $3.2 million in the same quarter last year.

As of Oct. 2, CEC had 742 units, 557 company-owned and the remaining 185 franchised, in 47 states and 12 other countries and territories.

Contact Ron Ruggless at Ronald.Ruggless@Penton.com

Follow him on Twitter: @RonRuggless

AutoNews Now: Supplying jobs by shifting into park

AutoNews - Wed, 2017-01-18 16:15
How GM creates supply jobs by shifting into park; SEC fines GM; Amazon patents tech for autonomous commutes; Jag E-Pace spied; Mini Countryman gets the Works; Loyalty awards.
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Tesla to build motors, gearboxes in Gigafactory

AutoNews - Wed, 2017-01-18 15:44
Tesla will manufacture the electric motors and gearboxes for the upcoming Model 3 at its Gigafactory in Nevada.
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Franchises target North Texas for expansion

SmartBrief - Wed, 2017-01-18 15:25
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Pizza Factory CEO shares leadership advice

SmartBrief - Wed, 2017-01-18 15:25
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SmartBrief - Wed, 2017-01-18 15:25
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SmartBrief - Wed, 2017-01-18 15:25
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SmartBrief - Wed, 2017-01-18 15:25
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Stay connected in Las Vegas: Download the #IFA2017 app

SmartBrief - Wed, 2017-01-18 15:25
Stay organized while at #IFA2017 from Jan. 29 to Feb.
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Partner with IFA for professional research trip

SmartBrief - Wed, 2017-01-18 15:25
IFA is seeking a service provider to assist with the planning and execution of a May 2017 professional research trip to Havan
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Do 2017's food and beverage policy changes affect your business?

SmartBrief - Wed, 2017-01-18 15:25
Legislators rang in 2017 with a host of new policies that affect food and beverage businesses.  -More
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The most important person is the one you are with in this moment.

SmartBrief - Wed, 2017-01-18 15:25
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Hyundai will shoot its Super Bowl ad live during the game

AutoNews - Wed, 2017-01-18 13:25
Most Super Bowl advertisers spend months on their ads. Hyundai this year will condense the process into roughly three hours by filming its spot during the game.
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