TO CELEBRATE THE FIRST-MONTH anniversary of its new Arch Deluxe sandwich last week, McDonald's made a rare long-distance delivery. It dispatched mascot Ronald to the floor of the New York Stock Exchange, where he served the 100 millionth Arch Deluxe Burger to Richard Grasso, the exchange's president. But while Grasso happily downed the new Dijon-mustard-topped burger, Wall Street worried that the company's new adult-style sandwich wasn't the smash hit many investors had hoped it might be.
Why'? Look at the numbers. Sure, McDonald's sold a lot of Arch Deluxes. But it gave away--or discounted--about 20 percent of them. The Arch doesn't seem to be stealing business from rivals Burger King and Wendy's, either. Some experts say it is cannibalizing McDonald's signature Big Mac, a charge company officials deny. "Our product-mix projections are right on target," says marketing executive David Green.
McDonald's competitors seem to relish the thought that McDonald's may be in a pickle. Burger King unveiled ads attacking the burger maker's prices ($2.99 for the Arch Deluxe) and touting its own 99-cent Whopper. Wendy's is putting all of its ad dollars into sales of its chicken entrees, traditional adult favorites. To compete, McDonalds is set to unveil new "Arch" chicken and fish sandwiches and will likely increase the size of its burgers from 1.6 ounces to 2 ounces. Will the Arch Deluxe go the way of the ill-fated McLean Burger? Wall Street will have to wait until the giveaways and the hype subside before it knows for sure.
Uncommon Knowledge
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