McDonald's Has More Problems Than Just Chicken Wings

It was recently revealed that McDonald's (NYSE: MCD  ) has around 10 million pounds of unsold Mighty Wings sitting in freezers because the company wasn't able to sell enough of them; this equates to approximately 20% of the company's initial inventory of the limited-time product. This puts McDonald's in the unenviable position of having to develop a new promotion to move the excess product and potentially revamp its promotional calendar to squeeze the next wing promotion in.

The wings setting in frozen storage are just a symptom of a larger problem for McDonald's, though. Anyone watching the Golden Arches will recognize this as the latest in a string of disappointments for the company, as the limited-time promotions that started off strong with the McBites have provided less of a draw with each new promo.

Admitting the problem
The 10 million pounds of wings that McDonald's is sitting on indicates more than just a lackluster promotion. Being unable to sell the wings hints that McDonald's doesn't know its target audience nearly as well as it thought it did; this is potentially disastrous if the company can't learn from its mistakes.

CEO Don Thompson spoke during one of the company's conference calls about the failings of the Mighty Wings, attributing the sales problems to a price that was "not the most competitive" and wings that were too spicy. Thompson also acknowledged that the slow-to-recover economy might have played a part, as might the look of the wings (which have been described as looking like "McNuggets with bones").

If that sums up all of the problems with the Mighty Wings, a revamping of the menu offering could help increase sales when they are reintroduced. That sales bump won't necessarily come to pass, though, especially if people still remember their previous experiences with the wings.

Is there a larger issue?
McDonald's introduced a new item that (in theory, anyway) sports fans would love, and advertised it decently. Unfortunately, the company wasn't able to successfully penetrate the sports fan market due not only to the price of the wings (at nearly $1 per wing, there are both better and cheaper options available) but also the timing of when the wings became available. Sports fans trying to get ready to watch their preferred teams might not want to wait until McDonald's breakfast hours are over and then deal with the early lunch crowd; this could be especially problematic for West Coast fans watching games broadcast from further east.

That's not to say that McDonald's was foiled by its breakfast hours, since the impact of such a scenario would be difficult to gauge at best and certainly wouldn't be as big of a factor as price or spiciness. Instead, it points to the fact that even a seemingly perfect target population might not have been a "sure thing." McDonald's overestimated the demand for Mighty Wings, and didn't think things through when determining just how many wings its target demographics would buy during the promotion.

Sell the wings, or else!
McDonald's is putting a lot of pressure on its franchises to get rid of the excess wings, reportedly letting franchise owners know that they'll have to participate in another promotion or will be held responsible for the storage costs of the wing surplus. Fortunately for the franchises, there will be a much smaller volume of wings to go through next time around.

Of course, this gives franchise owners one more reason to be unhappy with their McDonald's franchises; earlier this year, a number of franchise owners were complaining that the company was raising its franchise fees to unacceptable levels. Some owners suspect that the company is trying to prop up its sales by offloading costs onto the franchises and hiking fees to make those franchises more profitable to the company.

This could backfire for the company if franchise owners start choosing other restaurants when opening new stores; almost 90% of U.S. stores are franchise-owned, so offloading the damage onto franchises is yet another potential misstep by the company.

The bottom line
McDonald's used to be the fast-food king. Its crown is starting to tarnish, however, and if it wants to stop its decline then it needs to start learning from its mistakes. Better market analysis and improved franchise relations could help the company immensely, but there's no guarantee that either is going to come soon. If McDonald's can't learn from its mistakes, 10 million pounds of frozen wings might just be the tip of the iceberg.

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Read/Post Comments (12) | Recommend This Article (5)

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  • Report this Comment On December 30, 2013, at 12:17 PM, miru wrote:

    Just imagine how many people could be given something to eat if a large corp. like McDonalds was charitable enough to donate to food banks. Ronald takes enough money especially from targeting kids with advertising. Let's see if they are part of Christian America, instead of publishing how much money they may lose.

  • Report this Comment On December 30, 2013, at 12:27 PM, Croaxleigh wrote:

    Miru: Some McDonald's restaurants do donate to food banks, though that's typically a franchise decision instead of corporate policy. It's not just McDonald's food that they donate, either; there was a story a few weeks ago about New Jersey franchise owners who donated 500 turkeys to area food banks at Thanksgiving.

  • Report this Comment On December 30, 2013, at 12:37 PM, nunyadambizniz wrote:

    McDonalds corporate, not their franchises, are sitting on these chicken wings. They are trying to push them through their franchises. Corporate need to donate some of these perishables to food banks and take the tax write off even if it gives the impression that they are helping the poor.

    Just an observation: The cost of some of their meals, when supersized, exceeds the hourly wage of the person serving it. Food for thought.

  • Report this Comment On December 30, 2013, at 1:30 PM, majestk22 wrote:

    Is there a way we can buy those chicken wings in bulk from Mcdonalds if Yes ...Who do we contact ? would Mcdonalds consider this options ? They can contact me.

  • Report this Comment On December 30, 2013, at 1:52 PM, whyaduck1128 wrote:

    If I want wings for a specific time or event, there are lots of places I can call, and they'll have them ready at the appointed time--hot, ready, and better and cheaper than McDonald's. BWLD, for example.

    What I want from McDonald's is what I've always wanted--burger or other sandwich, fries, drink, cheap and FAST. The same thing I've been getting there for years, including just last night. All these "new" items do for us drive-through folks is really snarl the line.

  • Report this Comment On December 30, 2013, at 1:54 PM, picolo4u wrote:

    Hi, Please who knows an investment adviser than can tell me how to invest in the US stocks as a non resident and person with out social security number? please help!

  • Report this Comment On December 30, 2013, at 1:58 PM, CalBM1 wrote:

    I tried the wings once and ate one and threw the others away. They could d bone the wings and put barbeque sauce on them and sell sandwiches. It works for KFC

  • Report this Comment On December 30, 2013, at 3:18 PM, fegroup wrote:

    I applaud the writer's concern for franchisee welfare. One clarification - McDonald's franchisees are not allowed to operate other restaurant brands. They are not allowed to be involved in any other business that takes their time and attention away from their McDonald's franchises. However, if mistreated they can cut back on advertising and marketing. For a franchisee sales increases don't always drop to the bottom line.

  • Report this Comment On December 30, 2013, at 3:34 PM, LadyViv wrote:

    My main issue with McDonald's these days, is their modifying the drive-thrus into two lanes. Not only is the wait (and gas wastage) worse, but the confusion at the payment and pick-up windows are worse, as well. It's as simple as a math problem: Two into one is HALF!

  • Report this Comment On December 30, 2013, at 4:30 PM, Afterberth wrote:

    I'm sorry, McDonalds is that last place I would go for wings. Why don't they stick to what made them big, crappy Burgers and salty Fries.

  • Report this Comment On December 31, 2013, at 12:33 AM, MIAMISTYLE666 wrote:

    MY WIFE BIUGHT ME A 5 PIECE BOX OF THE MCDONALDS WINGS AND WITHIN A HALF AN HOUR I GOT ILL AND HAD DIARRHEA,I TOLD MY WIFE THAT THE WINGS GOT ME SICK ,THAT IM NEVER EVER GONNA BUY WINGS FROM MCDS AGAIN I SEE WHY NOW AFTER READING THIS ARTICLE,I REALIZE NOW THE WINGS ARE JUST SITTING AROUND IN THE FREEZER THEY GET BAD AFTER TIME THEY FRY THEM SELL THEM TO THERE CUSTOMERS AND NOT TAKE A LOSS BECAUSE THEY DONT WANT TO THROW THEM OUT,WOW I SHOULD SUE THERE ASSES FOR WHAT I WENT THREW THIS PAST SUNDAY AND I STILL HAVE THE RECEIPT.-VERY UPSET....

  • Report this Comment On December 31, 2013, at 12:43 AM, MIAMISTYLE666 wrote:

    OOPS I MEANT BOUGHT

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