McDonald’s is preparing to test hand-breaded chicken menu items in nearly 200 restaurants across the US and Ireland next year. This initiative aims to attract consumers affected by rising inflation. The fast-food chain has already been selling hand-breaded chicken strips and sandwiches in select stores in the Chicago area and 10,000 locations across Asia. This move is part of McDonald’s strategy to increase market share against competitors such as Chick-fil-A and Raising Cane’s, which offer hand-battered and -breaded chicken.
Executive Vice President Jill McDonald stated that hand-breaded chicken items represent a significant opportunity to enhance taste and quality. However, integrating fresh breaded chicken into McDonald’s operations presents challenges, as customers expect quick service. The introduction of fresh chicken will require new equipment, additional workstations, and a more complex cooking process.
Last week, McDonald’s announced a multi-year, $8.5 billion spending plan that emphasizes chicken products due to rising beef prices. The chain aims to capture an additional 1.5 percentage points of market share in chicken products by 2030.
One challenge is accommodating new equipment in restaurants. The chicken will be delivered raw, marinated, and frozen, necessitating thawing cabinets and separate workstations for breading, which will impact labor distribution. Currently, McDonald’s nuggets are delivered breaded, frozen, and partially cooked, requiring minimal preparation. Hand-breading will require more time and space, and workers handling raw chicken will be restricted from performing other tasks to prevent contamination.
McDonald’s noted that its NEXT spending plan includes operational improvements to manage labor efficiently without increasing staffing levels. Additionally, a new AI program called ArchIQ, already implemented in 8,000 locations in China, aims to streamline drive-thru orders and reduce labor costs.
Despite these efforts, challenges remain, as evidenced by Burger King’s previous experience with hand-breaded chicken sandwiches, which were discontinued due to implementation difficulties. McDonald’s is collaborating with franchisees to address these concerns, and a broader rollout of the new chicken items will depend on the pilot program's success.
The NEXT program also includes new flavors of Chicken McNuggets and optimized cooking processes to improve existing products. The implementation of the new program changes is expected to cost US franchisees approximately $800,000 over several years, with McDonald’s providing $8.5 billion in support, though assistance levels will vary by operator.
Additionally, McDonald’s plans to open 2,100 new restaurants globally this year, contributing to an anticipated 2.5% growth in systemwide sales by 2027 and around 2% by 2030. McDonald’s currently operates over 13,700 locations in the US, primarily through franchisees. The company's stock has declined by more than 23% this year.