BUSINESS
01/23/2015 02:33 pm ET Updated Jan 24, 2015

McDonald's May Cut More Menu Items

The McDonald’s menu could be getting even smaller.

Mike Andres, McDonald’s U.S. CEO, hinted on a conference call with analysts Friday that the chain may cut more menu items.

“This menu rationalization process is clearly ongoing,” Andres said. “As we look forward, we’ve added quite a number of products over the last 18 months or so, so we’re rationalizing that.”

Andres was responding to a question from an analyst about whether the chain would be willing to keep cutting the menu if the recent decision to slash eight items proved successful. As part of the test, McDonald's went from four quarter pounders with cheese to one, three premium chicken sandwiches to one and three snack wraps to one.

CNBC reported Friday that according to more than one franchisee, the Bacon Habanero Ranch Quarter Pounder, Bacon and Cheese Quarter Pounder, Premium Chicken Club Sandwich and Premium Ranch BLT Chicken Sandwich will be nixed.

So far, the company's menu changes have led to improved sales and better throughput -- a measure of how many orders are processed in a given period of time -- in test markets, Andres said on the call.

McDonald’s could use the help. The chain’s profits plunged 21 percent from the same quarter a year ago, according to the fourth-quarter earnings report released Friday. The past few months also marked the fifth quarter in a row that McDonald’s reported a drop in sales at U.S. stores open at least a year, an important metric of a restaurant's health.

Analysts, the media, franchisees and even McDonald’s executives have blamed the chain’s bloated menu for its poor performance in recent months. The menu -- which had just nine items in the 1950s -- ballooned to more than 100 items over the past several years, ranging from things like Egg McMuffins to a few McWrap varieties to smoothies.

The complicated menu has made it harder for McDonald’s to deliver what it’s known for: cheap and quick food. It also comes at a time when Americans are turning increasingly to chains like Chipotle and Five Guys, which have a handful of menu items but offer diners the ability to customize their orders.

McDonald’s is rolling out its own customizable options for burgers, called Create Your Taste, at 2,000 locations nationwide. Diners can pick from fancy toppings like creamy garlic sauce, guacamole and pepper jack cheese. Andres hinted on the call that the program could make it easier for the fast food giant to cut even more from its menu.

“That offers unlimited variety to our guests, they can now choose whatever they want, so it takes some of the pressure off a lot of the other menu items,” he said.

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