The Exchange

McDonald's slashes Mighty Wings price to sell off excess

The Exchange

For McDonald's (MCD), the Mighty Wings have gone to the bargain bin, relatively speaking.

After tepid sales during a promotion late last year left the company with what The Wall Street Journal reported was 10 million pounds of unsold wings, the restaurant operator is back with a pricing cut that's meant to remove the excess.

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(AP photo/McDonald's)

The Oak Brook, Ill., company is touting its plan to sell five wings for $3, a sizable discount from the initial pricing, which had each wing going for about $1. Previously, a customer could expect to pay $2.99, or perhaps even above that depending on the location in the country, for a trio of wings. Now, McDonald's has effectively lowered the per-wing outlay by 40% to 60 cents.

Even as that will make the wings considerably more cost-friendly for diners, it also means stores won't be clearing nearly as much as they would have had the offering been a success from the outset. Still, selling the wings at a significant markdown is far better than carrying inventory that simply takes up space or goes to waste altogether. Plus, about 80% of the initial wings bet of 50 million pounds did in fact sell at the higher prices, the Journal noted in December — so it wasn't exactly a disastrous failure.

At the time, the paper said the remaining wings were being held in frozen storage until McDonald's could work out the next steps. Federal government guidelines say up to a year of frozen storage is optimal to maintain quality for a whole chicken, while nine months would be the upper limit for chicken parts. That's regarding quality, not safety, which is deemed to go on indefinitely with properly frozen foods. McDonald's still would be well within that time frame.

Chicken vs. beef

The gamble on wings was justifiable. Americans have been trading out of beef and into chicken for years as tastes changed, household budgets demanded it and the idea of white meat being better for you caught on. Chicken has grown as a menu item at McDonald's, Burger King (BKW), Wendy's (WEN) and a host of non-fast-food chains. Wings themselves have surged in popularity, with Buffalo Wild Wings (BWLD) and Wingstop expanding their bases. At the same time, they've become a staple on tavern menus, as well as at Pizza Hut and Domino's (DPZ).

The key problem for Ronald and friends, more than anything, was price. No doubt it still will be too high for some segment of consumers. As the site Burger Business reported, franchise owners were irked about the wings from fairly early on. McDonald's has been struggling for months to figure out how to price its items correctly in order to keep store traffic and revenue rising. In the process, it got to a point where its menu became too cumbersome to manage.

McDonald's hasn't always had the ability to hike prices in the still-cool economies of the world, namely the U.S., home to more than 14,000 of its 35,000 locations, to the extent it might prefer. Last year, visitor counts declined, a rare and terrible occurrence for the business, so the company needs to deal with both price and menu mix to ensure that doesn't continue. One big change in its strategy came with alterations to the long-standing Dollar Menu, as it went broader and in some cases, more expensive.

Some consumer reviews were also less than fawning about the wings. In September, reviewer "Ryan" noted on GrubGrade: "I’m likely not going to be a repeat buyer of McDonald’s Mighty Wings. If you like spicy chicken, you should give them a fair try, but to me I think there are better options available that are likely a lot cheaper."

McDonald's actually noted the spiciness of the wings might have been a deterrent, but the reboot still embraces the hotter flavor.

Regardless, shareholders will want better execution than this from a company whose stock has flatlined in the past year. Certainly, this experience won't mark the end of limited-time offers for McDonald's. But if you want to try the Mighty Wings themselves, time is of the essence. Considering how it went these past few months, it may be a very long time before we see them back alongside the Big Macs and Quarter Pounders.

This article has been corrected. Earlier, it said McDonald's had 10 million unsold wings last year. The correct amount was 10 million pounds of wings.

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