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 4 of 4)
11-12-2008 @ 2:13AM
gus gus said...
does it really matter since when you add tax its really over a dollar anyway??
11-15-2008 @ 3:45AM
Sue said...
....we already pay # 1.59 for a double cheeseburger...have for several months...(and we're in the midwest)
11-13-2008 @ 3:21PM
bill said...
all you people better realize if you want a double cheeseburger fix it at home . none of the fast food places serve cheeseburgers .closest thing to a real hamburger at a cheap restaurant is culvers and its not all that great.
11-12-2008 @ 4:18AM
Anthony said...
Forget that I would'nt pay even $1.10 let alone $1.20 for a double cheeseburger. Mcdonalds is the richest bastard in the world. They open stores in foreign places where ppl make a livin selling traditional food, and all of a sudden they cant survive because of McDonalds wanting to take over another area and punk on the ppl wanting to work there and then they cant do anything about it but find another way to survive. They pretty much leave 100 ppl jobless and hire 20 for example. Ppl end up buyin bc its cheap and they're broke. McDonalds can easily stay in business if they keep the same prices, they just wanna be the richest bastards out there and have pride on having the biggest profits.
11-12-2008 @ 4:43AM
jimmyjazz said...
Me don't need to worry because I'm the hottest Gay boy in Ohio. I don't eat at these nasty places....hell girl...I don't eat period! That's how I can pull off spandex honey!.........Prices going up? Whatever. Whenever I feel down I just slap on a wig and high heels and say "hello!" Girlpower!!!
11-14-2008 @ 10:47AM
Weasel said...
I work at one of the local Munkey chunks (Mc'donald's) here in Washington and the price for a double cheese as stands is $1.29 before tax and $1.40 after; much to my chargin, I am a third generation golden arches slave... Not to say that as a child I aspired to become a burger flipper or something;
but work is work... Especially when you have a nine month old child.
It confuses me when people have such a strong conniption when the price of a freakin' burger goes up.... We had a 5% price increase last month and we are going to have another in January right in time for a $1.50 minimum wage increase. I have had more than a couple people say the same kinds of things to me in passing conversation as has been said here and I never give any of it much concern... Mc'Donald's doesn't listen to it's Patrons or it's employees they will do what they think is best to make their checkbooks full and nothing else.
11-12-2008 @ 7:53AM
ANA said...
Wendy's (WEN) $ 3.42 per share.
Burger King (BKC) $21.00 per share.
Mc Donald's (MCD) $56.29 per share.
Mickey D is the leader in the industry and they know what they are doing.
Mc Donald's is in business worldwide and $.19 more for a burger is reasonable in keeping up with higher food costs. The majority of people eat there because the food and service are good, a lot to choices on the menu and they are very clean. For the few whiners who won't pay $.19 more for a burger and for those that don't like fast food and pick on Mc D's, stop complaining-no one forces you to eat there.
11-12-2008 @ 12:28PM
Rusty White said...
Well i think that if they go up on there dollar menu i will be going to BK and Wendys so good bye Mcds