McDonald's hints at upgrading chicken sandwich, doubts more ball pits will be built

Fox Business Briefs: McDonald's global sales were down nearly 24-percent in the spring quarter in the U.S., the decline was more than 8-and-a-half percent.

In an interview with Time Magazine, McDonald's USA CEO Chris Kempczinski hinted that the chain is looking at updating its chicken menu items, when asked about criticism of its 2019 chicken sandwich.

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"We're certainly working on ways that we can update and upgrade our chicken offering in the U.S. Suffice to say we will continue to be competing and innovating in chicken," he told TIME.

Food critics were not impressed with the Chicago-based chain's limited-edition Spicy BBQ Chicken Sandwich that it rolled out in September 2019.

The sandwich was launched alongside Spicy BBQ Glazed Tenders, which were said to have a hint of jalapeno. The offerings came out months after consumers showed excitement about the Popeyes Chicken Sandwich and the permanent return of Wendy's Spicy Nuggets.

Ticker	Security	Last	Change	Change %
MCD	MCDONALD'S CORP.	271.99	+1.01	+0.37%
QSR	RESTAURANT BRANDS INTERNATIONAL INC.	71.42	+0.06	+0.08%
WEN	THE WENDY'S CO.	19.25	+0.25	+1.32%

The Washington Post went as far as characterizing McDonald's Spicy BBQ offerings as "tardy" and "an amalgamation of various spare parts lying around the company garage" for not being innovative enough.

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"I'm sure we'll continue to be getting critiques about how we're doing," the McDonald's CEO said, but he added that the restaurant is "feeling good about where we're at, and we look forward to bringing the customers some more innovation in chicken."

The chain currently sells its Buttermilk Crispy Chicken Sandwich and McChicken. It also tested two chicken breakfast sandwiches earlier this year.

In the breakfast category, McDonald's has seen a steep decline in sales throughout the coronavirus pandemic.

In the first quarter of 2020, Kempczinski told analysts that breakfast sales were down compared to other mealtimes, and it very much so remains true in August.

"Breakfast has definitely been the most impacted day part. If you think about breakfast, lunch and dinner, breakfast is most susceptible to people not going to work," Kempczinski told TIME. "We did some work, looking at cell-phone data and tracking mobility: what we saw in the mobility data was consistent with what we saw in the restaurant, which is essentially that people moving around was down dramatically in the mornings."

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But it's not just McDonald's that has struggled to maintain breakfast sales. According to a June report from the NPD Group, breakfast transactions for U.S. restaurant chains declined by 18 percent. Before the pandemic, breakfast traffic in fast-food establishments had nearly quadrupled in the last five years while cereal declined.

Now the markets have switched with more people choosing cereal while they remain home. Cereal consumption went up a 16 percent in the second-quarter of 2020, according to Barrons.

Similar to this phenomenon, Kempczinski pointed out that the pandemic has made consumers desire comfort foods.

At McDonald's, the brand's "core menu" is in demand, which includes the company's Big Mac, Quarter Pounder and French fries.

"You're seeing it in grocery-shopping behavior where these brands that in some cases people have viewed as, years ago I used to eat soup, and now all of a sudden people are eating soup again. You're seeing a similar desire for trusted favorites," Kempczinski shared. "They're less willing to be trying new things. They're less likely to go out there and try some fancy new burger at McDonald's."

Outside of changed eating habits, the 51-year-old CEO said that ball pits in McDonald's PlayPlaces may become a thing of the past thanks to the coronavirus.

"I don't know if we've got ball pits in our future. There's probably some good public-health reasons not for us to be doing a lot of ball pits."

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