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McFresh Reviewer:   Douglas L. Wilson, MBA

Abstract

McDonald’s is struggling to attract customers between the ages of eighteen and thirty-two for whom McDonald’s no longer ranks in the top ten favorite restaurant chains. The McWrap is one of the most important additions to McDonald’s U.S. menu in years. It was created to gain the attention of customers seeking fresher, healthier offerings from competitors. Referred to as a “Subway buster,” McDonald’s hopes the McWrap will enable the restaurant chain to remain relevant, specifically to its millennial target audience.

McDonald’s doesn’t operate on gut feelings, instincts, or even experience. The company uses focus groups, finds test markets, and runs the numbers. The flavors that, after months of market tests, were finally chosen for the wrap are mass: sweet chili, creamy garlic, and ranch. These extensive market tests also address packaging, presentation, product name, and efficiency factors.

Based on sales, McDonald’s is the largest restaurant chain in the world serving 69 million people a day, with 14,157 restaurants in the United States and more than 34,000 stores worldwide. But the competition is doing well. Chipotle had a 20 percent increase in revenue in 2012, Five Guys came in at 14 percent, and Subway sales reached $18.1 billion. Subway now has more restaurants than McDonald’s, with 39,618 globally and 25,936 in the United States. Cofounder Fred DeLuca envisions 100,000 subway stores by 2030.

McDonald’s has yet to share any sales figures for the McWrap, and that may not be good news. However, even if McWrap sales ultimately disappoint, the McWrap may bring customers into restaurants with healthy intentions yet their order strays to the traditional McDonald’s menu. 





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