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McDonald's Is About to Make Some Night Owls Angry

Rick Munarriz, The Motley Fool

The pickings are about to get slim for late-night diners at McDonald's (NYSE: MCD) in a few weeks. The world's largest burger chain announced that it will be scaling back its menu offerings after midnight at some of its restaurants nationwide. The simplified menu keeps some of the signature burgers and most of the sides and beverages, but chicken and fish fans will be out of luck.

The iconic Filet-o-Fish sandwich will no longer be offered after the clock strikes midnight. Salads, sandwiches, and wraps featuring grilled or crispy chicken will also be unavailable. Chicken McNuggets will be the only poultry item offered in the revised late-night menu, as even the premium buttermilk chicken tenders won't be diving into the fryer after midnight. The revised menu will kick in starting April 30.

McDonald's with a Minions makeover promotion.

Image source: McDonald's.

Chicken little

McDonald's isn't afraid to tweak its menu offerings, and it also doesn't shy away from playing with the clock. Most Golden Arches watchers credit the late 2015 rollout of All-Day Breakfast, when the chain began offering many of its morning faves throughout the day, as the cornerstone of its corporate turnaround. Comps have remained largely positive since that move, and shareholders have been just as delighted as afternoon cravers of hotcakes and Egg McMuffin sandwiches. The stock has more than doubled -- up 107% -- since All-Day Breakfast made its debut. The stock hit another all-time high on Friday. Will the trend now start to reverse when it starts taking things away from the menu during certain hours of the day?

The rationale for the move is that narrowing down its entrees to Big Macs, Quarter Pounders, Chicken McNuggets, and Happy Meals makes things a lot easier on its staff, and that should speed up the slow drive-through lanes that are becoming more common as the menu expands. The graveyard shift is also usually when the less seasoned McDonald's employees start, making it harder to pick up the prepping nuances for all of its lunch and dinner offerings. 

If there's a noticeable improvement in the speed of completing orders, everyone should win. Customers will be more satisfied with the quicker turnaround, as long as their desired eats are among the remaining menu items after midnight. McDonald's will be able to fulfill more orders, especially with cars less likely to bail out of what can now be long and slow-moving drive-through lines in the wee hours when the dining rooms are closed.

Still, McDonald's is dropping the ball here. Why didn't it introduce a new item -- say, something only available from midnight to 5 a.m.? If it's eliminating nearly two dozen gourmet sandwiches, salads, and other entrees, why can't it roll out one signature item that would offset the sting of the multitude of eliminations? The chain already has some tempting items that are only available in the morning -- I'm looking at you, tantalizing doughnut sticks. Having a literal "limited time" item could even draw daytime guests to the chain much later in the evening, just as much as it's probably attracted some of its lunch or dinner regulars to come over in the morning to see what the doughnut sticks are all about. 

The burger giant is in relatively good shape these days. Global comps continue to remain positive, though traffic trends closer to home have been problematic lately. Scaling back the menu at one of the few chains that consumers know is open late into the evening is riskier than it probably thinks. We'll find out next month if this gamble pays off.

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Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.