Our Approach to Value
Dear Fellow Owners,
It’s hard to believe we are half way through 2019. It’s been a whirlwind with lots of changes. We have new elected leadership in the NFLA with a much different approach to leading. Mark and the team are indeed leading, which is why we voted for them. The company is beginning to appreciate that leadership. Slowly. Change is hard. We still have work to do.
We have changed the focus to our drive thru’s, where our customers want to use us most. We have reengaged the gate keeper. We are studying our operations to ensure our speed and efficiency. We are finding ways to drive profitable growth. Yet, we are still losing guest counts. This continues to be a concern. Yes, there are some changes in how our guests are using us. Larger orders serving more customers, but the magnitude of the loss in transaction counts is greater than what can be explained in order aggregation (especially in the Southeast US).
Two things come to mind. First, our approach to value. We learned from last year that everyday value at the national level is impossible and ineffective. Dollar Drinks is the last aspect of D123 that must be eliminated from OPNAD’s calendar. It is not working for the majority of the US. For those markets that it is, they can continue to support it at the local level. This is where everyday value should be decided upon and supported. There is opportunity for deal at the national level but should be used sparingly. We must find more sustainable growth opportunities. Price is not the answer, especially in today’s economic environment.
Secondly is our product promotion. Our Quarter Pounder success shows what we can do when we promote a product our customers want from us. It helped that we improved the product, although we have sacrificed speed in the process. But promoting our customers’ favorites does generate results. We wish we could say the same about the worldwide favorites. They may be favorites abroad, but they are not our customers favorites. A favorite, that our customers want, is a chicken sandwich. Unfortunately, they have to go to Chick Fil A for it. Chick Fil A’s results demonstrate the power of chicken. Yes, we have great Chicken Mcnuggets and our McChicken is a very good product. But we do not compete in the premium chicken sandwich category, either grilled or crispy. Our US Southeast markets’ results should concern everyone. You may not have Chick Fil A’s in your market or to the degree they have them in the southeast, but they are coming. And they don’t discount.
A Chicken Sandwich at McDonald’s should be our top priority. JFK called for a man on the moon, our call should be a category leading chicken sandwich. We don’t have to reinvent the wheel. We didn’t invent the drive thru, we perfected it. Chick Fil A invented the Chicken Sandwich, but we can do one better. Our Southern Style Chicken sandwich was very close to category leading. It needs some tweaks. We need to serve it in a foil bag and we need to butter the bun, but the patty recipe was excellent. It can be served in our existing kitchens within our existing service times (even faster). We should test it in the south and if successful, we should put it on OPNAD as soon as possible. If it’s not, then in Fred’s words “someone please come up with a world class Chicken Sandwich!!”
Food is still the driver in our business. Food that is irresistible and fast. Food that we don’t have to discount. We get the food right, and the guests counts will follow.
Your “reaching for the moon” NOA Board