Lessons on Downsizing from a Retail Giant

In 1953, it was pretty simple to order a meal at McDonalds. You had a choice of a hamburger or cheeseburger, fries, a malt shake and five kinds of drinks. No McRibs or Crispy Chicken sandwiches. No Big Macs or Quarter Pounders. Since that humble beginning, McDonald’s menu has grown to a whopping 145 menu items (not all at the same location). There are so many items and combinations that it’s easier to order by number.

“Has McDonald’s Menu Gotten Too Big,” is a question Venessa Wong asks in recent Bloomberg BusinessWeek article. In 2007, there were a measly 85 items on the menu. Choice is good, but harder to manage and deliver consistently fresh and hot. A bigger menu also is more expensive, with increased ingredients storage, labor and waste. 

It costs more to train an employee to assemble 20 different kinds of sandwiches with the appropriate condiment and sides and do it quickly. The don’t call them “fast food” restaurants for nothing. More variety opens up more opportunity for error. If customers aren’t happy, food comes back and goes straight to the garbage can. It may as well be hard, cold cash in the can. Advertising and public relations add to the cost every time a new product is introduced. Getting people in the door or at the drive-thru window is what it’s all about.   

People’s tastes change. Today there is more emphasis on “eating healthy,” though two items that are marked for elimination are the fruit and walnut salad and Caesar salad. Salads are the darling of the diet-conscious set, or so it seemed. 

Too much choice can be confusing. How many customers hang back, staring at the menu items on the wall trying to figure out what they want? Time is also money. Customers who hesitate at a busy lunch rush make others wait, taking the “fast” out of the food. Cranky customers make for an unpleasant dining experience for them and everyone around them.

Retailers of all kinds can learn some lessons for McDonald’s. They became famous for a few great items, served hot and fast. They created a brand, and over time expanded. But there comes a tipping point in any business where you can lose your appeal by trying to be something to everyone.

What’s good for business may not be good for the operation. Retail is people-driven, and a huge menu or vast inventory may be difficult to manage, remember and promote. Add more product and you have to add more training, technology, storage, shipping and costs. The lure of making it big through expansion into new products and services can backfire. You can water down your brand to where you’re just like everyone else. Find a McDonald’s at a freeway exit and you’ll probably find a Burger King, Checkers, Arby’s or some other regional hamburger restaurant next door.

Too much of a good thing can be bad for a retail giant and for any small business. A few unique choices can make your retail business stand out from the rest. Who needs a fruit-and-walnut salad, when you really came for the cheeseburger and fries, anyway?  

Photo Source: Morguefile.com