McDonald's developing separate dinner menu, puts pizza test on hold

Nation's Restaurant News, Oct 7, 1991 by Milford Prewitt

OAK BROOK, Ill. -- Moving farther afield from its beginnings as a sandwich specialist, McDonald's is developing a burgerless separate dinner menu anchored by pizza and supplemented by chicken, pasta or other entrees.

The chain, which has been striving to bolster persistently weak evening traffic, said it would put its 500-unit pizza test on hold while it tests several pasta dishes and refines its skinless broiled chicken offering over the next several months.

The new dinner menu, expected to be ready within two years, will not include sandwiches or burgers, reported analysts attending a biennial meeting with company officials. McDonald's told the stock pickers that a new beef entree and a Chinese dish for the menu are also in the early development stages.

McDonald's also announced that it was setting its sights skyward by teaming up with United Airlines to test the serving of special meals for children on the air carrier's flights to and from Orlando, Fla.

The meals, packaged in a box similar to a Happy Meal, will consist of a suasage biscuit sandwich for breakfast, a larger-than-normal cheeseburger at lunch and dinner, along with fruit, MaDonald's cookies and carrot sticks. Puzzles will also be available.

A McDonald's spokeswoman said the company had been eyeing the airline industry for some time, but the challenge of maintaining quality and freshness had presented obstacles.

With a separate dinner menu, McDonald's is hoping to duplicate at dinner what it achieved nearly 15 years ago at breakfast through a dedicated and subsequently lucrative menu for that daypart. But while morning patrons can order from the breakfast menu only, some selections from McDonald's regular menu will likely be available to dinner patrons.

Investors reacted almost immediately to McDonald's plans, particularly the continued de-emphasis on burgers. In heavy trading a day after the meeting, McDonald's share price jumped $2, to close at $35.63.

"When the meeting was planned, I think many of us were expecting that they were going to make some major announcement, about pizza moving forward," said Lisa Cook of Montgomery Securities. "But it turns out that pizza is going to be leveraged with a number of other menu items to develop dinner."

"It was pretty apparent that somebody at McDonald's has been asking themselves 'if we can bring fast food to breakfast, why can't we do it at dinner," said Roger Lipton, an analyst with Ladenburg, Thalmann, another analyst who attended the meeting. "So they've put pizza on the back burner for now, but when they roll out the dinner daypart, pizza will be the focus."

Just a month ago McDonald's kicked off a major pasta test among 40 units in Rochester, N.Y. The menu items consist of lasagna, fettuccine alfredo, and spaghetti with meatballs. The chain also has tested pasta in other cities in the South as recently as 1989.

McDonald's has been exploring ways to boost its dinner business for at least four years.

Perhaps the most visible effort was its 1987 television advertising campaign "Mac Tonight." Patterned on the hit song "Mack The Knife," the ad featured a moon man character playing a baby-grand piano atop a two-story Big Mac with a Manhattanlike skyline in the background. It was intended to boost demand for the chain's famous Big Mac in the evening.

About two years later McDonald's began testing four dinner platters in its Nashville, Tenn., market, but the effort did not achieve desired results.

The company's biggest splash to garner dinner business occurred in July 1989, with the introduction of McPizza, arguably the most-watched menu test in recent restaurant history. McDonald's has even reconfigured some test units to ape a neighborhoodlike pizzeria with checkered table cloths and eating areas that did not open until after 6 p.m.

"I think they are beginning to recognize that their competition is no longer just those in the burger segment," Cook said. "Chili's, Sizzler and others in the casual-theme segment are forcing them to concentrate on the dinner daypart."

The analysts, who numbered about 100, were fed the pizza, chicken and pasta products during lunch. Cook said the lasagna was her personal favorite. She noted that since the pizza was first introduced in 1989, McDonald's has reformulated the sauce and the pepperoni to make them spicier and has changed the crust to make it thinner and crispier.

In other disclosures, McDonald's executives told the analysts what the company's quarterly earnings statements have been hinting at for nearly two years: that future profitability and sales growth is largely in foreign lands.

McDonald's is particularly eager to expand in what it called "the Big Six," Australia, England, Germany, Japan, France and Canada.

Of the 600 new restaurants planned to be open this year, 400 are earmarked for other countries. Of the 675 to 750 new units slated for 1992, between 425 and 450 of them will be outside of the United States.

"It's good positioning for them," Lipton said. "McDonald's is the second most recognized brand in the world, after all."