The world has not been swayed by the coy laugh of organic vegetables, the winsome eyes of local produce, the sparkling personality of grass-fed beef. When money's tight, the world goes to McDonald's for a dollar burger, and maybe a splurge on Southern-style chicken, an opportunity to win big -- or small, that next package of French fries has to come from somewhere -- with the chain's traditional 'Monopoly' game. Same-store sales were up 8.2% worldwide, with a respectable 5.3% increase in U.S. outlets.McDonald's Corporation (NYSE: MCD) is still struggling to gain Wall Street approval for many of its recent moves, such as expanding hours and diving head-first into competition with Starbucks, rolling out espresso bars and fancy blended coffee drinks into its U.S. stores. Given some rough numbers from Starbucks (NASDAQ: SBUX) out yesterday, it seems reasonable to wonder whether customers are avoiding the pricey pastries and coffee drinks at Starbucks and heading for the Dollar Menu at McDonald's.
All this news comes, however, with an undercurrent of concern for the future of that vaunted Dollar Menu. Costs for the Double Cheeseburger are pressuring franchisees' profits to the breaking point, and McDonald's is considering raising its price to $1.19 and adding a new sorta-double cheeseburger called "McDouble," eliminating one slice of cheese from the product (leaving two hamburger patties and one slice of cheese, along with the typical bit-o-condiments).
Will increased costs and margin pressures mean the Dollar Menu becomes the Buck-fifty Menu? Will customers stick around if the concept is trashed altogether? Will consumers feel nickled-and-dimed if cheese slices and pickles start disappearing from their favorite foods? As long as McDonald's is offering the cheaper option of several alternatives, and customers' wallets are squeezed, the Big Mac will still be a popular choice. But that's a rather pessimistic future; in my opinion price will not be the only long-term concern for consumers. Soon health and sustainability may become more of a focus for consumers, and McDonald's will have a tough decision about how to respond.
Reader Comments (Page 1 of 4)
11-11-2008 @ 8:12PM
1dollarluver said...
If McDonalds raises their dollar menu prices I will be going Burger King or Taco Bell. My family eats there all the time for lunch and Mcd food is not worth no more than a dollar.
11-11-2008 @ 8:18PM
LOL said...
1dollarluver no wonder your family is obese you eat fast food all of the time. My CHRIST HELP US!
11-11-2008 @ 8:24PM
HungryInCali said...
Friggin mcdonalds... if that dog food called a double cheeseburger rises in price i'll start a friggin boycott, that dang thing is all i got on a $0 a month diet maaan!
11-11-2008 @ 8:30PM
k said...
$1.20 for a double cheeseburger,I will still buy 3.
Bk is lousy and no dollar menu
11-11-2008 @ 8:31PM
Denny said...
I say maybe this move of raising there dollar menu may come around and bite them. Again greed is here again...
11-11-2008 @ 8:35PM
fatboy said...
screw mcdonalds
run them out of business
11-11-2008 @ 8:37PM
Mason said...
But K, you are forgetting that BK actually tastes good and can fill you up. unlike McDonald's. BurgerKing also doesn't believe in putting dog food in their hamburgers and won't do everything they desperately can to get more fat people addicting to their fat, nasty food. Adding Coffee and bottles of pop and Movies!! What the heck! They are so freckin' desperate it makes me sick.
11-11-2008 @ 8:41PM
HEATHER said...
MCDONALDS FOOD SUCKS ANYWAY!!! I WOULDNT EVEN PAY A DOLLAR FOR IT. THE FOOD TASTES FAKE..
11-11-2008 @ 8:43PM
Kwilts said...
If would like to know why the prices at all Mc Donalds are not consistent. I pay $1.08 for a Sausage Mc Muffin with Egg in my home state. When I come to California I am charged $3.44 at one place and $3.11 at another, in the same area. Why the difference in price? When traveling across the country it makes it hard to budget for food when there is such a difference in prices charged for the same item. In this economy why would a company raise their prices? If prices are raised I will think twice about eating there and find somewhere else cheaper. Mc Donalds and other companies are constantly adding items to their menus, it makes it very confusing and sometimes effects the items they feature. It's like too many cooks in the kitchen spoils the soup.
11-11-2008 @ 8:44PM
HOE BAG said...
GUYS WILL GET ME A DOLLA BURGER OFF THE DOLLA MENU IN RETURN FOR SUM BLING! BLING!!
11-11-2008 @ 8:46PM
Beth said...
You can eat healthy at fast food retaurants if you want to.
I am a personal trainer and I have always considered fast food a great crutch if you are smart about it. A great source to look up all sorts of info on foods is Nutrition Data and it is free http://www.nutritiondata.com My two favorite foods to recommend for weight loss and maintaining muscle
are broccoli and flax. There is a great flax called fitflax which is roasted, tastes delicious and I have my clients just sprinkle it on salad great right out of the bag. It is fitflax http://www.fitflax.com
This has helped speed up weight loss with my female clients.
My favorite fast food item to recommend is the grilled chicken Caeser at McDonald's ...so fresh. Use half the packet of dressing, throw out the crotons and they have the option of double chicken.
11-11-2008 @ 8:52PM
Linda said...
When we have to stop for something fast and cheap we've started going to Wendys. Much better food, more choices and I don't feel like my stomach was immersed in fat.
11-11-2008 @ 9:10PM
Uncledickierc said...
Oh for the good old days. How many of you remember the ad with the two elderly ladies at the counter and one says to the other, "Look..Hamburger, french fries and a coke and change back from a dollar"???
11-11-2008 @ 9:11PM
chriskulbeda said...
We stopped going to McDonalds long ago and the recent decision to bow to the religious right (wrong) and no longer sponsor the Gay Chamber of Commerce as well as the lousy food and now this? That just makes my family of six seek other options for our burger fix. There are plenty of great burger joints all around and although they are not fast food and might cost a bit more... you get what you pay for. I'd rather chow on a FRESH burger and had cut fries any day!
11-11-2008 @ 9:12PM
OUCWBOY said...
OK,
I don't know if any of you have noticed, but all fast food joints increase prices when minimum wage goes up. AND, if it increases again, you will all feel the pinch in prices. If you have to pay the labor more, you gotta charge more for the product to offset the wage expenses. NO business will decrease their profits, just to pay more in labor. If you get an increase in minimum wage, you will actually have less buying power than you do now. It's called inflation.
In 1968 minimum wage was $1.60 // hour, but you could buy a top of the line Corvette for $4500.00, and a McDonalds Hamburger was 15 cents. SO, today the Fed minimum wage is what $6.25?? That makes an increase of about 400% increase, but the price of a Corvette has increased about 1300%, AND a McDonalds hamburger has increase about 730%. MORE $$ in your pocket, but you can't buy as much...........
11-11-2008 @ 9:12PM
OUCWBOY said...
Kwilts.......
That is caused by the difference in the minimum wage difference between CA and the rest of (most of) the nation. Fed Min wage is $6.25 and it's $8.25 in CA ...... refer back to my last post about minimum wage causing inflation.
11-11-2008 @ 9:25PM
Greta said...
WENDY'S is much better! And super fast! That's our choice when in-a-hurry.
11-11-2008 @ 9:27PM
stlfire said...
costs have gone up, therefore prices have to go up; economics 101. If you can't afford $1.19 for a double cheeseburger, stay at home. That is not too much to pay for a sandwich.
11-11-2008 @ 9:27PM
lost world said...
I stopped eating at mcdonalds after i realized that most all hire illegal aliens and pay them slave wages they never use the e-verify system to check to see if these people have a fake or stolen ss# and they do this so they can pay them minimum wage and work the hell out of them all this at the american workers expense. This is an anti american sadicious corproation preying on human slaves. I would gladly pay 2 or 3 dollars for a cheeseburger if in knew they were hiring americans and paying them a living wage.
11-11-2008 @ 9:28PM
Christine said...
I love how McDonalds is actually going to try and pass serving the McDouble at 1.19 and your actually getting less the original Famouse Double Cheeseburger.
If they go through with this Ill just go the the BK across the street. They have a great dollar menu that has twice the amount plus better then McD's anyway.