• by Thom Forbes , December 9, 2014

Against analysts’ grim expectations, things got worse than anticipated at McDonald’s last month even as the company scrambles to adapt to changing tastes for food-on-the-go by offering customized items at the same time that it is simplifying its menu and catering to regional tastes.

Under a headline that begins “Big Mac Whacked,” NPR’s Yuki Noguchi informs us that “McDonald's is not loving its financial numbers these days. The fast-food chain reported that same-store sales in the U.S. tumbled 4.6% in November compared to a year ago, as the company continues to struggle to find solid footing.”

"McDonald's news this morning was jarring," Pacific Management Consulting’s John Gordon tells Noguchi, and observes that Monday's announcement “had his colleagues abuzz.”

Worldwide sales slid 2.2% in November. Overall, it’s the steepest drop in sales at the chain since 2001.

“Analysts expected same-store sales, a key indicator of company performance that measures sales at McDonald's locations open at least 13 months, to fall 1.7%, according to research firm Consensus Metrix,” writes Jessica Wohl in the Chicago Tribune.

With its stock falling 3.8% on the news, Sterne Agee analyst Lynne Collier says “McDonald's’ strategies in the United States are not ‘meaningfully differentiated,”’ Wohl reports.

“The bad news comes after the fast-food giant announced Sunday in an exclusive USA Today report that it plans to widely expand its customized burger program in the USA, in which consumers can order a personalized burger from a special kiosk tablet,” the newspaper’s Bruce Horovitz and John Waggoner re mind us. “The program, which had been in four locations in Southern California, will expand to 30 more locations in five states this year and to 2,000 locations nationally next year, the company said.”

Under president and CEO Don Thompson, management plans to “better deliver against [the] evolving demands” of consumers by simplifying the menu while offering customizable items such as “personalized” burgers at the same time.

“But the custom-made burgers will take longer to make and cost more. Because they can take five to seven minutes to make, the custom burgers are not practical in the drive-thru, where many McDonald's [outlets] do up to 70% of their business,” Horovitz and Waggoner write.

The Wall Street Journal’s Julie Jargon reported last week that McDonald’s’ menu “may have grown too big to succeed” against “more focused” competition such as Five Guys Holdings, In-N-Out Burger, Chick-fil-A and Chipotle Mexican Grill.

“These companies ‘basically do a few things and do them very well,’ Scott Lang, who owns six McDonald’s outlets in North Carolina, told Jargon. “I’m envious that some can do that.”

The Associated Press’ Candice Choi and Michelle Chapman report that McDonald's plans to remove some items “with slower movement” from the national menu in the U.S.

For example, “the Bacon Clubhouse burger, which McDonald's introduced this year as a premium offering, could become a regional offering,” Greg Watson, McDonald’s SVP of menu innovation, tells them in a phone interview. 

“What menu complexity does is it makes your marketing a little less efficient. It makes your operations a little less efficient,” consultant Gordon tells NPR’s Noguchi.

“In the meantime, McDonald's is also trying to alter long-held perceptions about the quality of its food. It recently launched a campaign that answers questions such as, ‘Does McDonald's beef contain worms?’ and is planning new marketing for the year ahead,” the AP’s Choi and Chapman write.

One would hope. “No. Gross! End of story” isn’t going to sell a lot of Big Macs, whether they are personalized or not.

At the same time, it's clearly not just about the economy.

“Each of our geographic segments is focused on regaining business momentum by prioritizing initiatives to improve comparable sales performance in the near-term, while developing innovations to deliver sustained profitable growth through McDonald's Experience of the Future,” CEO Thompson says in a statement announcing the results.

“Until recently, investors could think that McDonald’s’ problems perhaps partially reflected economic weakness, and not the structural problems that it faces. That approach doesn’t work now — it all looks structural —  and, hence, McDonald’s stock dropped on Monday,” observes Justin Lahart in a “Heard on the Street column” in the Wall Street Journal.

On the bright side for bottom-liners, Forbes contributor Tim Worstall sees the poor sales results as “fairly bad news” for living-wage advocates behind the Fight For $15 campaign. Declining sales suggest “that the campaign itself will only succeed through legislative action and, again, it would have to be a very tin-eared politician who demanded a doubling of the basic wage in a company facing such problems,” he writes.

Let them eat Sausage, Egg & Cheese McGriddles Extra Value Meals, in other words.