Would You Like McBites With That?

McDonald’s preps its new-product pipeline for 2012

McBites will debut nationwide in early spring

OAK BROOK, Ill. -- Following the release of strong third-quarter earnings, McDonald’s Corp. announced it’s taking its Chicken McBites national next year. The miniature fried-chicken pieces will be joined in 2012 by the relatively more healthful Cherry Berry Chiller blended drink and blueberry banana nut oatmeal.

McBites have already been test-marketed in Australia and Detroit, and the company plans to feature the bite-sized pieces--similar to popcorn shrimp--as a limited-time offer in early spring. They’ll be available in packages of 4, 6 and 12 ounces with dipping sauces, priced from $1.99 to $4.99.

Meanwhile, the Cherry Berry Chiller is being tested in several markets in Michigan; in some markets a small chiller is free with any large sandwich. Other McDonald’s products getting new flavor options in 2012 will include premium chicken sandwiches, coffees and hot chocolate.

The company’s third quarter earnings exceeded analysts’ expectations. Same-store sales increased 5% for the year--4.4% for U.S. stores specifically. The company expects year-over-year revenue to rise 4% to 5% in October, Crain’s Chicago Business reports.

The company credits the strong quarter to the additional advertising for Chicken McNuggets and accompanying sauces, which grew 10% in sales in the quarter. Frozen strawberry lemonade and mango pineapple fruit smoothies increased beverages sales by 16%, and breakfast-item sales increased 20% over last year.

Despite a positive quarter, McDonald’s is still cautiously watching commodity costs and their continuing impact on margins. Ingredient costs rose 8% in the third quarter, proceeding 6% and 1% increases in the two previous quarters, and the company expects them to increase further, reports Crain’s.

“These prices, which typically moderate after the summer, have remained high,” chief financial officer Peter Bensen said in last week’s earnings call. “As a result, we now expect commodity cost in the U.S. to be up a little more than previously expected, 4.5% to 5% for the full year with fourth-quarter increases easing compared to second and third quarter.”

When asked what the higher expenses will mean for the Dollar Menu in 2012, CEO James Skinner responded that the “Dollar Menu is here to stay. We have support by our franchisees for the Dollar Menu going into 2012.”