Happy meals not making McDonald's as happy
More problems for McDonald's which is seeing its children's Happy Meals sales falling according to this Wall Street Journal story (subscription required). Maybe a good thing. My nephew eating chicken McNuggets for lunch can't be all that good for him (I know, I know, it's not that often -- note to my sister who's sure to be reading this ;-).
The Happy Meal -- which consists of an entree (hamburger, cheeseburger or chicken nuggets), fries, small drink and free toy -- is crucial to McDonald's. It accounts for more than 20% of U.S. transactions, or approximately $3.5 billion in annual revenue, according to McDonald's. It also generates sales from the adult who buys a child a Happy Meal. Some restaurants report that average orders with Happy Meals -- whose prices vary according to market but start at $1.99 -- are 50% higher than those without Happy Meals.
No other restaurant chain that primarily serves adults has been so successful at wooing children. The 1976 introduction of the Happy Meal and subsequent arrival of in-restaurant playgrounds gave McDonald's a dominant share of the fast-food market for kids, which remains an insignificant business for competitors like Wendy's International Inc. and Yum Brands Inc., parent of Pizza Hut, KFC and Taco Bell. Even Burger King Corp. is a relative newcomer to the children's market, having launched its Kids Meal in 1990.