2014 in Fast Food: A Year of Reckoning, Makeovers, and Waffle Tacos

The year in fast food got under way with the much-anticipated national launch of a Taco Bell breakfast menu, featuring the Waffle Taco. McDonald's has thoroughly dominated the fast food breakfast world over the years, and Taco Bell's encroachment on its turf was equal parts bold and nasty—including ads that mocked McDonald's for being old-fashioned and outdated, and that used real-life Ronald McDonalds to endorse Taco Bell's breakfast. The squabbles expanded into a broader war over fast food breakfast, which is the only traditional meal time that's been experiencing sales growth of late. For its part, McDonald's has introduced new breakfast options and rolled out free coffee offers twice in 2014 in order to win over customers. While McDonald's remains the leader in fast food breakfast and chain restaurants overall, the expansion and increased competition from Taco Bell and other players in the fast and fast casual space are a big part why the Golden Arches has struggled mightily—a theme throughout 2014.

Higher quality ingredients and some level of customization in food ordering are highly prized by millennials. They're also both central parts of the "fast casual experience and prime reasons that Chipotle, Panera Bread, and the rest of the restaurant category are flourishing. To try to stay competitive—and perhaps even hip with the youngsters—old-fashioned brands such as Pizza Hut and McDonald's raised the bar on personalized orders in 2014. The former introduced a whole new menu featuring six new sauces, 11 new crusts, and four spicy "drizzles" that can be mixed and matched, while the latter has been frantically expanding a build-your-own burger concept to offset underwhelming sales.

In addition to expanded breakfast and more personalization options, plenty of quick-service restaurants plodded on with a years-in-the-making trend of bolstering up menu choices in general. At the start of 2014, McDonald's franchise owners were complaining about how large the menu had gotten—25 items for the "Dollar Menu and More" section alone, where most things cost $1 or $2. Expanded menus slow down service (especially at the drive-thru), but that hasn't stopped many fast-food operators from trying to attract customers with more and more choices. The two most obvious examples are Starbucks, which has been adding tea and alcohol to menus left and right and broadly expanded its food selection and plans on doubling food sales in five years, and Pizza Hut, which simultaneously made its menu larger and more personalized to woo younger customers in particular. On a smaller scale, Wendy's decided to add the highly successful Pretzel Bacon Cheeseburger to the menu permanently, and virtually every national fast food establishment keeps on rolling out limited-time offer items regularly.

Shrinking Menus
While the pressure to expand menus still exists, McDonald's in particular has come to realize that there are limits to how big a menu can get before it hurts the business. Items like the McWrap, which comes with two choices of chicken and three sauce options and cannot be prepared in advance, slow service to a halt—making it virtually impossible to McDonald's goal of getting orders to customers in one minute or less. After yet another report of declining same-restaurant sales in early winter, McDonald's decided it was finally time to cut the menu, which had grown to 121 items, a 75% increase in a decade. The fast food giant is now testing the removal of some Quarter Pounders and other sandwiches to make the menu more doable (and profitable) for the company. Casual sit-down dining chains including Chili's and Red Lobster likewise decided in 2014 to trim back menus, which had metastasized and proven unwieldy and not particularly popular with customers.

Burger King, Taco Bell, Starbucks, Chick-fil-A, Dunking Donuts, and McDonald's are among the fast-food operators that advanced the options to pay for purchases—and often, order before ever setting food in the restaurant—with a smartphone in 2014. When you think about, it especially makes sense for fast food players to be at the forefront of the mobile payment sphere: These businesses are based on the premise of satisfying cravings in a hurry, so of course they love the idea of customers being able to order with the tap of a phone, before really thinking through what it is they're ordering. The advent of Apple Pay, accepted at McDonald's, Subway, and Panera Bread, among others, is good for business too because customers don't need to have cash or even a credit card on hand to get their fix of food.

Periodic walkouts by fast food workers around the U.S., combined with a big protest outside McDonald's headquarters in Illinois in May, which led to hundreds of arrests, have brought various versions of the "Fight for $15" (a campaign to boost all fast food employee wages to a minimum of $15 per hour) into the national spotlight in 2014. The movement appears to be growing, with walkouts in 150 cities in September, then reaching 190 cities during a planned strike in December. While it seems unlikely that the world's biggest fast food companies will give in (and certainly not easily), they may not have a choice in some parts of the country: Seattle instituted a $15 minimum wage this year, and cities such as Los Angeles, San Francisco, Chicago and New York are considering doing the same—moves that would affect not only fast food workers, but all low-wage employees.