It’s About Saving More Mcmoney Mcdonald’s Considering Cost Cuts It Hopes Customers Won’t Notice

Switching to a cheaper coffee roast. Doing away with ketchup packets and using dispensers. Buying cutlery in bulk instead of individual wrappers. Putting Quarter Pounders in wrappers instead of boxes.

These may seem like small things to consumers. But in the intense competition of the fast-food business where squeezing profits is becoming more difficult, these changes being considered at McDonald’s could mean thousands of dollars for each restaurant.

According to an internal memo obtained by the Tribune, this is the most recent attempt by McDonald’s to squeeze out costs at the store level as it struggles to improve same-store sales throughout its system. And it comes as the company is about to embark on yet another “2 for $2” national sandwich discount in the coming weeks, sources said.

The question is whether the Oak Brook, Ill.-based fast-food giant can implement these seemingly small changes without alienating consumers.

“It’s probably a minimal risk,” said Ron Paul, president of Technomic Inc., a restaurant consulting firm based in Chicago. “It’s always a risk if it’s something the customer can notice.”

According to the internal memo to Chicago McDonald’s operators in early December, the company over the past couple of weeks already has switched to a low-weight blend of coffee. Executives said it would save the average restaurant about $1,000 a year in costs.

The new coffee, still made by the same manufacturer, “is the same coffee, same blend” as the coffee it has been using, but is a lower-cost “roast/grind” version than the one it had been using.

A McDonald’s spokesman said Wednesday he was aware of the Chicago-area coffee shift, but said the only change being made was in the way the coffee was ground, and that the change wouldn’t have been made if it affected consumer satisfaction.

“Otherwise you wouldn’t do it,” said the spokesman, Richard Starmann.

The new coffee had been in use by two dozen operators and restaurants in Chicago “with no consumer awareness of the shift,” the memo stated.

The change is part of a drive within McDonald’s regions “to make changes within our control to simplify restaurant operations and improve profitability,” the memo said.

Besides the coffee switch, local McDonald’s executives are recommending operators switch to bulk ketchup dispensers in restaurants instead of ketchup packages. It is also recommending that operators buy bulk cutlery and straws instead of wrapped utensils and straws “where health regulations allow,” the memo states.

Those moves could save the average restaurant $600 per year, the memo stated.

In addition, the company also is making available to operators a Quarter Pounder wrap instead of the cardboard box the sandwich is currently packaged within. That change could save operators as much as $700 a year, according to the memo.

Other options for franchisees: shredded lettuce instead of leaf lettuce for its Deluxe Line of products could save up to $500 per year, per restaurant.

McDonald’s Starmann downplayed the changes, saying that trying to improve store efficiency has been an on-going process for the 42 years McDonald’s has been in business.

“It isn’t some new initiative. It’s an ongoing process,” he said. “It has to be in the realm of good customer satisfaction.”