McDonald’s CEO says he needs to know adding a vegan burger will boost traffic to restaurants

As pressure mounts on McDonald’s to add a vegan burger to its line-up, CEO Steve Easterbrook compared the decision to its choice to start offering breakfast all day.

“The question is will the demand make absorbing it worth the complexity because it will drive the business? We had a similar discussion maybe four years ago about All-Day Breakfast,” Easterbrook said on CNBC’s “Squawk on the Street. ”

After being implemented, All-Day Breakfast spurred same-store sales growth for several quarters. But competitors took notice and beefed up breakfast offerings. Earlier this month, amid its broader push to speed up service, McDonald’s said that franchisees could trim their all-day breakfast offerings.

McDonald’s has been under pressure in recent months to add a vegetarian-friendly burger to its menu as more and more of its competition has taken the plunge.

“I don’t think it’s faddish,” Easterbrook said. “Whether it maintains the same level of buzz is what’s interesting.”

Its German locations sell a plant-based burger made by food giant Nestle, but McDonald’s has said that individual markets decide what is best for their customers.

The plant-based craze also arrives as the Chicago-based company has been trimming its menu to reduce complexity at its restaurants. It has scaled back its late-night offerings and nixed its line of premium burgers.

“When you look at the whole meat substitute type ideas, I think what will be interesting for us will be to see who is particularly interested in that,” Easterbrook said to CNBC’s Carl Quintanilla on Wednesday. “Is it an existing customer who just wants an alternative option, does it bring a new customer in?”

RT: McDonald's  CEO Steve Easterbrook 161117
McDonald’s CEO Steve Easterbrook speaks during a press conference in New York November 17, 2016.Shannon Stapleton | Reuters

At its annual shareholder meeting Thursday, Silvia Lagnado, the company’s global chief marketing officer and director of its menu, said that the company was monitoring the plant-based meat alternatives but would not disclose any plans at this time.

In the meantime, McDonald’s rivals are benefiting from its lack of action. Restaurant Brands International’s Burger King is testing the Impossible Whopper, which is made with the plant-based Impossible Burger. In the pilot, the new offering boosted traffic to locations in the test market by 18.5% in April, according to a report from location data firm inMarket inSights.

McDonald’s saw traffic grow last quarter, but like others in the industry, it has struggled to bring customers back to its stores.

“I think across the entire sector, traffic is tight right now, and people are eating out less, would you believe it or not,” Easterbrook said.

Some consumers might be displeased with McDonald’s lack of vegan options, but investors pushed the stock to a new all-time high last week. In the last year, its stock is up 22%.

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