* Small french fries, drinks to fall off Dollar Menus
* Adding new "Extra Value Menu" from existing items
By Lisa Baertlein
March 8 McDonald's Corp
restaurants in the United States will be tweaking and expanding
their promoted value-priced items later this month as many
diners remain strapped for cash and the world's biggest
hamburger chain works to increase its lead over rivals.
McDonald's will change national advertising for its Dollar
Menu, removing small drinks and small french fries and replacing
those items with fresh baked cookies and ice cream cones, Neil
Golden, chief marketing officer for McDonald's USA, told Reuters
in an interview.
Restaurant operators, who bear more of the brunt of higher
food costs, often follow suit.
On March 26, McDonald's also will debut an "Extra Value
That menu will include 20-piece chicken McNuggets, double
cheeseburgers, chicken snack wraps, Angus snack wraps, medium
iced coffees and snack-sized McFlurries, plus up to four
regional options, that were previously listed elsewhere on its
"The choices have been available for quite some time, we're
just making it easier for customers to find them and enjoy
them," Golden said, adding that the prices on those items will
not change. All Extra Value Menu items will be priced above $1
and many will be below $2.
Clay Paschen, who owns 16 McDonald's restaurants in Southern
California in partnership with his father and brother,
participated in Extra Value Menu testing.
"The Dollar Menu is still king ... and will continue to be a
foundation for us. We are using and need both of them to
continue our strategies," Paschen said.
In addition to the Dollar Menu and the new Extra Value Menu,
McDonald's offers Extra Value Meals.
McDonald's separately has been taking steps to both
reinforce its core brand and burnish its image.
To that end, it is promoting its mainstay Big Mac hamburger.
At the same time, it is advertising the fruit and other
healthier items in its Happy Meals after sidestepping a battle
over its use of toys to market meals to children. Additionally,
the company has been running ads about the farmers who provide
its potatoes and other ingredients to promote the quality of its
McDonald's has a broad menu - including $1 hamburgers,
salads, espresso coffee drinks and "premium" Angus burgers -
that appeals to a wider range of customers than the young men
who typically frequent other fast-food chains.
It uses its massive size to negotiate lower costs for food
and other items that its rivals.
All of those efforts put the heat on other fast-food chains,
many of which do not have the resources to match McDonald's
blow-for-blow, said Bob Goldin, an executive vice president at
consulting firm Technomic.
McDonald's U.S. share of the informal dining market was 12.5
percent in November 2011, according to NPD Crest. That was up
from 11.8 percent in November 2010.
"They've got their competitors on the ropes," Technomic's
Goldin said. "This is where being an 800-pound gorilla is really