McDonald’s to Add New Spinoff Restaurant Rooted in Beloved Nostalgia

More than perhaps any other fast-food chain, McDonald’s  (MCD) – Get Free Report leans heavily into consistency and nostalgia.

As the Golden Arches is notoriously conservative with their menu offerings, more than one generation has the same memories of eating Happy Meals, grabbing an Egg McMuffin on the way to school or work or making a late-night McNugget run.

DON’T MISS: McDonald’s Earnings Blast Forecasts As ‘Grimace’ Campaign Helps Boost U.S. Sales

Over the last year, McDonald’s has also made a big stride to reach those who remember certain beloved characters from the chain’s past — last October, the chain launched its “Adult Happy Meals” with 1970s and 1980s-era character figurines like the Hamburglar and Grimace. A viral campaign featuring the beloved purple mascot sent same-day store sales up nearly 12% between April and June.

YouTube (McDonald’s)

New Restaurant Concept To Have ‘All The DNA of McDonald’s’

Another major announcement to come out of the July 27 second-quarter earnings call is the launch of a new restaurant concept — while sparse on details of what this would look like, chief executive Chris Kempczinski said that it would start testing “a small handful of sites” known as CosMc “in a limited geography” in early 2024.

“CosMc’s is a small format concept with all the DNA of McDonald’s, but with its own unique personality,” Kempczinski told investors.

While McDonald’s promised to release more details in the following earnings call in December, the CosMc name and success of the Grimace campaign suggest that the chain will continue to tap into the public’s viral interest in nostalgic characters and concepts.

CosMc is a part-alien, part-car character that appeared in McDonald’s commercials in the late 1980s and early 1990s. At one point, the chain described CosMc as “a round Sputnik-like object” that is “fun-loving and wacky.” While the character has also appeared in a McDonald’s video game, only hardcore fans will remember as the character was never as popular as Grimace and the Hamburglar and disappeared with the rest of the McDonaldland characters by the mid-2000s.

“This quarter, the theme was Grimace,” Kempczinski said in the earnings call. “Grimace has been everywhere the past few months, all over the news and more than 3 billion views on TikTok. Not bad for a 52nd birthday. This viral phenomenon is yet another proof point of the power of marketing at McDonald’s today.”

The Chain Is ‘Always Experimenting And Learning New Ways,’ McDonald’s CEO Says

The hint toward a new restaurant is monumental given how rare it is for McDonald’s to try anything beyond its traditional Golden Arch format. In 1993, it briefly tried to enter the pizza industry by purchasing the Ohio-based Donato’s Pizza but soon divested from it alongside similar unsuccessful attempts with Boston Market and Chipotle Mexican Grill  (CMG) – Get Free Report

This experimentation comes amid a time of wider McDonald’s growth and expansion. The chain has also committed to spending more than $1 billion to open 1,900 additional global locations. More than 400 of these will be across the U.S. and Canada.

No details on what the CosMc restaurants will look like or what type of food they will serve have yet been released but the mere allusion that it was coming generated much internet excitement.

“While our primary focus is on opening traditional units, we are always testing and learning new ways to meet the needs of our customers,” Kempczinski said in the final reference to CosMC in the earnings call.

Get exclusive access to portfolio managers and their proven investing strategies with Real Money Pro. Get started now.

Related Posts