Tobey Nesbit 04.12.24

As California's new $20 fast-food minimum wage takes effect, McDonald's is pulling out all the stops to maintain its dominance in the Golden State. The burger giant has assembled a special "rise and dominate" team to brainstorm creative solutions, and their efforts are already bearing fruit.

One key initiative is the reintroduction of customer-favorite bagel sandwiches at locations in California and near Washington, D.C. This move allows McDonald's to diversify its menu with a less labor-intensive offering, helping offset the higher labor costs.

But McDonald's isn't stopping there. The company is also diverging from its typical national ad campaign strategy, dedicating a whopping $15 million to California-specific marketing. This hyper-local approach aims to better connect with the state's consumers.

"McDonald's is really pulling out all the stops to protect its market share in California," said industry analyst Sarah Johnson. "They know they need to get creative to maintain profitability in the face of rising wages."

The company's innovative marketing tactics extend beyond California as well. In the Netherlands, McDonald's launched "the world's first scented billboards" - large digital displays that emit the aroma of freshly cooked french fries to entice passersby."Smell has been proven to be more effective at sparking clear and emotional memories than images," a McDonald's representative explained. "This campaign aims to remind people of the 'Good Times at McDonald's' through the power of scent."

Globally, McDonald's has also found success with other strategies like investing in core menu items, leveraging digital channels, and introducing limited-time offerings. These multipronged efforts have helped the fast-food giant maintain its dominance, even in the face of economic headwinds.

As California's minimum wage continues to rise, McDonald's will undoubtedly need to stay nimble and innovative to protect its market position. But with a dedicated "rise and dominate" team and a willingness to experiment, the Golden Arches seem poised to weather the storm.