McDonalds has added 12 more sit-down diners in Indiana. Following a string of dispersed marketing initiatives to boost sales growth beyond 2%, McDonalds is investing further in its branded ‘fast casual’ diners. It could be a good way of tapping a current trend in food retail, but McDonalds must make sure that these efforts do not cannibalize traditional sales or worry franchisee owners further.

Fast-casual dining has become big in America. With consumers tightening their purse strings, restaurants that are neither upscale nor too downscale are seizing the market. Between 1998 and 2000, total ‘fast casual’ sales increased from $28.9 billion to $31.3 billion – a 15% increase. In comparison, the food industry as a whole normally grows at a rate of only 2-3% per year.


McDonalds has been trying to tap into this trend for a while, acquiring Chipotle Mexican Grill, Boston Market, Donatos Pizzeria and the British-based Pret a Manger. Following a successful trial in Kokomo, Indiana,






Company Profile:

McDonald’s Corporation




McDonalds will now convert another 12 traditional fast-food restaurants, also in central Indiana, into sit-down diners. They will serve everything from breakfast combos to steak dinners, as well as the usual hamburgers and fries. Some existing McDonald’s with a Diner Inside will also be opened, leveraging existing distribution networks in a similar manner to last year’s McCafe experiments in Chicago.

Other growth initiatives include new sandwiches, increased value promotions and more restaurant types such as McSnack Spots and McTreat Spots. Which of these efforts will ultimately pay off is yet to be known, but McDonalds certainly needs the boost. In the first nine months of 2001, the company saw US system-wide sales rise just 2% to $15 billion. Same-store sales grew less than 1% in Q3.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

In making these changes, McDonalds must be mindful of its existing business. New restaurant formats may cannibalize existing fast-food sales, and new in-store initiatives are not always easy to implement at the franchisee level. For example, a system recommended to speed service requires one employee to take the order and cash, while another fulfills it. This forces franchisees to add labor, thus compounding existing cost escalations.


There is also a growing desire for increased corporate communication, especially after the latest round of franchisee cuts. If McDonalds can meet these requests and leverage this existing immense network, it might find the key to the growth it has been looking for.


(c) 2001 Datamonitor. All rights reserved. Republication or redistribution, including by framing or similar means, is expressly prohibited without prior written consent. Datamonitor shall not be liable for errors or delays in the content, or for any actions taken in reliance thereon.







To view related research reports, please follow the links below:-


Leading Restaurant Chains in Europe


Fast Food & Home Delivery Outlets Plus