McDonald's stuck with 10 MILLION POUNDS of Mighty Wings.

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#1 Edited by Dreams-Visions (26569 posts) -

Back in September, fast-food giant McDonald's (NYSE: MCD ) began selling bone-in chicken wings as part of a limited-time promotion, putting the company in direct competition with Yum! Brands' (NYSE: YUM ) KFC and Buffalo Wild Wings (NASDAQ: BWLD ) . The company bought 50 million pounds of chicken wings, planning to sell them for a dollar a pop under the moniker of "Mighty Wings."

When this promotion was first announced, I wrote an article that predicted that Mighty Wings would be a flop, with the high price being the biggest issue for consumers. It turns out that I was right, and now McDonald's is stuck with 10 million pounds of unsold chicken wings.

Source: McDonald's.

What went wrong?

In the Wall Street Journal article that reported the unsold wings, an anonymous franchisee is quoted as saying: "Mighty Wings are proving once again that we can't sell premium items in large numbers because we still have the Dollar Menu."

This statement says a number of things about the current state of McDonald's. First, McDonald's is simply not a premium brand, however hard the company may try. McDonald's has grown to its current size not because of quality but because of value. At the same restaurant that sells double cheeseburgers for a dollar, premium chicken wings don't work.

Mighty Wings were essentially KFC quality at Buffalo Wild Wing prices, and that's a combination that cannot succeed. At $2.99 for three wings, McDonald's priced Mighty Wings well above the competition. Five hot wings at KFC cost $3.99, or $0.80 per wing, compared to $1 per wing at McDonald's.

The comparison gets even worse for McDonald's when restaurants like Wingstop are considered. The 600-location chain that specializes in wings sells 10 wings for $6.99, or about $0.70 per wing, with the price per wing declining with volume. It baffles me that McDonald's expected to be able to compete with its price so far above that of the competition.

McDonald's Mighty Wings were priced similarly to Buffalo Wild Wings, a pretty serious misstep given the quality gap between the two companies' food. The poor results were predictable, much like they would be if McDonald's attempted to sell an $8 cheeseburger. Fast-food quality at premium prices just doesn't work. Buffalo Wild Wings provides an experience, with sports playing on a myriad of TVs and plenty of beer to go along with the wings. McDonald's offers none of this, only mimicking the price.

Frustration is setting in

The quoted franchisee above uses the phrase "once again" to describe McDonald's attempts to sell premium items, signalling that frustration with the menu is beginning to take its toll. In November, the company acknowledged that it had added too many new menu items too quickly, and that service had suffered because of it. New items such as premium coffee drinks, smoothies, salads, and wraps have reduced efficiency and hurt business, and Mighty Wings certainly didn't help the cause.

With McDonald's desperately trying to boost same-store sales, franchisees are suffering with poorly-thought-out promotions like Mighty Wings. What's worse, McDonald's is forcing franchisees to participate in another promotion to clear the remaining Mighty Wings inventory, with the threat of having to absorb the costs if they don't comply.

With a large fraction of McDonald's restaurants worldwide franchised, keeping the relationship between the company and the franchisees positive is extremely important. But in the quest for higher sales, McDonald's is making it harder to turn a profit at the restaurant level. This isn't a good long-term strategy.

The bottom line

McDonald's is trying to be all things to all people, desperately trying to boost sales at the expense of efficiency and franchisee relations. Mighty Wings were a huge flop, embarrassing the company and upsetting franchisees. McDonald's needs to simplify its menu and stick to what it's good at, turning its stores back into the well-oiled machines they used to be, before lattes and wraps slowed everything down. Mighty Wings were clearly not the answer.

http://www.fool.com/investing/general/2013/12/20/mcdonalds-mighty-wings-were-a-mighty-flop.aspx#.UrnpOPRDt8E

Ouch. That's a lot of wings.

#2 Posted by slipknot0129 (5489 posts) -

Wish I had some hot wings.

#3 Posted by deeliman (2402 posts) -

They can send some to me.

#4 Edited by JML897 (33120 posts) -

I had some and thought they were pretty good but I never had them a second time because the prices were ridiculous.

#5 Posted by Nibroc420 (13567 posts) -

Wish I had some hot wings.

This.

Also, why not just bake them, and hand them out to homeless people.

No sense in letting them rot.

#6 Posted by konvikt_17 (22175 posts) -

now i want some mango habanero wings from Buffalo Wild Wings.

might go get some on boneless thursday, if its open.

#7 Posted by Fightingfan (38011 posts) -

They should of grilled em.

#8 Posted by Dreams-Visions (26569 posts) -

now i want some mango habanero wings from Buffalo Wild Wings.

might go get some on boneless thursday, if its open.

good man.

#9 Posted by k2theswiss (16599 posts) -

thats what happens when you try sell wings more then a dollar per wing at a burger joint...

#10 Posted by ChiefvsGordon (1085 posts) -

I guess Kap and Flacco couldn't market them to the younger crowd. they are way over priced. i just went to mcdonalds yesterday and seen them in person for the first time, i think it was like $12 for a meal of them. i'll stick with my mcchicken and coffee(the only thing i get from there).

#11 Posted by PSP107 (11878 posts) -

I guess Kap and Flacco couldn't market them to the younger crowd.

I don't think their marketable/popular enough.

#12 Posted by Makhaidos (1613 posts) -

Meanwhile, there are six-hundred thousand homeless people in this country, thirty-six percent of which are families.

#13 Posted by Ugalde- (3653 posts) -

@JML897 said:

I had some and thought they were pretty good but I never had them a second time because the prices were ridiculous.

This exactly. Great wings, but way too expensive.

#14 Edited by LostProphetFLCL (17169 posts) -

They should have been boneless. Would have at least tried them then.

But yeah, with a Buffalo Wild Wings right across the street from me, I am good on the wing front anyways.

#15 Posted by JML897 (33120 posts) -

Bone-in wings >>>>>>>>>> Boneless wings

Boneless wings might as well just be chicken tenders

#16 Posted by BiancaDK (18297 posts) -

Meanwhile, there are six-hundred thousand homeless people in this country, thirty-six percent of which are families.

and meanwhile, there are 870 million people in the world suffering from chronic undernourishment

and so on

and so forth :)

#17 Edited by Ugalde- (3653 posts) -

@BiancaDK said:

@Makhaidos said:

Meanwhile, there are six-hundred thousand homeless people in this country, thirty-six percent of which are families.

and meanwhile, there are 870 million people in the world suffering from chronic undernourishment

and so on

and so forth :)

Life sucks.

#18 Edited by WickedChainy (288 posts) -

How is this news to anyone? who is willing to pay 3 bucks for 3 wings when you can pay 5 bucks and get 20 chicken nuggets... HURP DE DURP

#19 Posted by TwistedShade (3155 posts) -

I don't know if they bought 50 Million Pounds, and are now stuck with 10 Million that doesn't sound so bad.

#20 Posted by GazaAli (22550 posts) -

Its just wings settle down.

#21 Edited by destinhpark (4700 posts) -

Oh god, those are so gross.

#22 Edited by lamprey263 (23294 posts) -

I haven't been to a McDonald for a while now, they got that McRib thingy now?

Anyhow, as for those chicken thingies, their McNuggets are fine, as long as they don't get more expensive I'm fine with them. If anything they need new sauce variety, if they want to copy Buffalo Wild Wings they need that sauce variety. Personally I like the Mango-Habañero because it hurts so good and tastes good too, McDonald's needs a flavor like that, and that Asian Zing, and even something as punishing as Blazin. Those sauces are really the only reason I go to Buffalo Wild Wings, if McDonald's had an equally impressive variety of sauces for their nuggets I'd be hitting it up a lot more.

#23 Posted by lamprey263 (23294 posts) -

anyhow, if McDonald's were creative with their accounting they could maybe write off the loss, just give the food out free to employees and their families and write off the retail cost, and feeding their employees is a needed cause since we know how piss poor they all are because we all know McDonald's pays them shit

#24 Posted by Stesilaus (3305 posts) -

"McDonald's needs to simplify its menu and stick to what it's good at, turning its stores back into the well-oiled machines they used to be, before ___LATTES___ and wraps slowed everything down."

Whenever I find myself idling my car engine in a McDonalds drive-thru, waiting for several minutes to advance the length of just one car, I know exactly what to expect ...

... the sight of one of those f*****g lattes being passed through the service window! :(

#25 Posted by GhettoBlastin92 (1148 posts) -

As someone with poultry experience, 1 per wing is way to high, especially coming from Mcdonalds. I agree with the article, Buffalo wild wings gives the consumer an experience that Mcds does not even come close to having. Also, they were frigging nasty, I bought a 3 wing box and never got them again. Easily the worst wings I've tasted coming from a restaurant.

#26 Edited by killerfist (19812 posts) -

They will probably turn them into McNuggets now

Also 1$ per wing? lol wtf were they thinking?

#27 Posted by BiancaDK (18297 posts) -

@Ugalde- said:

@BiancaDK said:

@Makhaidos said:

Meanwhile, there are six-hundred thousand homeless people in this country, thirty-six percent of which are families.

and meanwhile, there are 870 million people in the world suffering from chronic undernourishment

and so on

and so forth :)

Life sucks.

it can certainly feel that way sometimes, i'll give you that

#28 Posted by Netret0120 (2046 posts) -

Haven't eaten from there in years. Unhealthy crap

#29 Posted by darkmark91 (2855 posts) -

Just dump it all in Africa, Im sure it will go by fast there. :P

#30 Posted by HuggyBear1020 (456 posts) -

If nobody else wants them I'll take them.

#31 Edited by foxhound_fox (87837 posts) -

A dollar per wing? :hah:

Sell them bulk to places that do wings for $0.35-0.40 per and maybe they'll make some money back.