Let no good deed go unpunished. That seems to be the response from McDonald's (NYSE:MCD) to a goodwill gesture from rival Burger King to bury the hatchet on their friendly competition and join forces for one day, for charity.
In a full-page ad in Wednesday's New York Times and Chicago Tribune, Restaurant Brands International (NYSE:QSR) proposed that its Burger King chain and its Golden Arches foe create a pop-up restaurant midway between the two companies' corporate headquarters and sell "McWhoppers," with all proceeds going to the charity Peace One Day, a nonprofit that promotes the U.N.'s International Day of Peace that occurs on Sept. 21. It even created a website, McWhopper.com, to explain the idea.
But McDonald's CEO Steve Easterbrook took to Twitter to act like a wet blanket, telling its burger rival it had a good idea as ideas go, but that they could do something bigger and better together. Oh, and next time? Just pick up the phone and call instead of taking out full-page ads.
If comments to the McDonald's Facebook page are any indication, it was a poorly thought out response, as commenters largely see Easterbrook's note as a callous answer to what was a goodwill gesture.
Admittedly, Burger King's proposal was really just a marketing ploy, but like much of how McDonald's has responded to a years-long slide in sales, it was precisely the wrong move to make.
McDonald's has been frustrated by changing consumer tastes that have seen its customers gravitating toward healthier food choices. Its global comparable sales fell 0.7% in the second quarter and were down 2% in the U.S., the seventh straight quarter they fell. In contrast, Burger King's revenues were up 2.6% year over year to $4.4 billion, and comps jumped 6.7% systemwide.
While last year it had also stumbled, if fast-casual chains such as Chipotle Mexican Grill and Panera Bread were actually the cause of McDonald's decline, then sales at Burger King and Wendy's would have been similarly gutted. But they haven't. Burger King's sales have rebounded, and comps at Wendy's were up 2% last quarter.
Then, of course, there are the chains that just revel in their burgers, fries, and shakes, such as Sonic,which is still able to show tremendous gains.
So the decision by McDonald's to abandon its simple burger menu and emulate the fast-casual chains by trying to go upscale is as wrong a response to its declining position as Easterbrook's response is to Burger King's advertising outreach.
In reality, consumers are looking for simplicity, even those -- or maybe particularly those -- who frequent fast-food chains. Sonic offers a few good choices and sticks with them. Burger King and Wendy's have far fewer menu options than does McDonald's. Heck, even Chipotle Mexican Grill keeps its menu relatively limited.
McDonald's instead opts for confusion, giving consumers a blinding array of options that not only invites confusion but also slows down the ordering process. While Easterbrook has paid lip service to reining in the sprawling menu at McDonald's, in practice very few items have been cut even as more items and limited-time offers are added.
In all probability, had McDonald's enthusiastically endorsed its rival's offer, it wouldn't have made a bit of difference in the direction its sales are going, but it wouldn't have cost it anything, either. And it would have benefited a good cause.
By instead choosing to appear petty and admonishing Burger King that there are more important real-world battles besides their business competition, Easterbrook and McDonald's come off looking bad, and that can have real consequences.
Whether we will ever get to see a McWhopper actually made is still an open question, but the continued slide at McDonald's shows no signs of abating, meaning it needs all the goodwill it can muster.
Rich Duprey has no position in any stocks mentioned. The Motley Fool owns and recommends FB, PNRA, and TWTR. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.