Courtesy of Mish.
McDonald's is facing lean times, not just in the US, but globally.
Earlier this year, McDonald's shifted from a 'Dollar Menu' to an "Extra Value Menu" which Chief Executive Don Thompson said didn't "resonate as strongly" with consumers.
One reason? There was no value in it, except for McDonald's.
The Wall Street Journal reports Amid Falling Profit, McDonald's to Revisit 'Dollar Menu'
McDonald's Corp. reported a 3.5% decline in third-quarter earnings as sales slowed more dramatically than expected because of a sluggish economy and a disappointing marketing campaign.
"We face softening demand, heightened competition and rising costs in many of our markets," Chief Financial Officer Pete Bensen said. In a weaker economy, customers tend to stop getting extras like drinks and desserts and premium items like Angus burgers, which all offer higher profits to McDonald's. Plus, they may not go out to eat as frequently.
Wall Street analysts were expecting an increase in per-share profit for the quarter, not a decline.
"We're going back to talk of the Dollar Menu," Mr. Thompson said.
He said the chain is losing momentum world-wide, with sales at restaurants open at least 13 months falling so far in October compared with the same time last year. Such same-store sales are a key indicator of restaurant chains' strength, and McDonald's hasn't seen declines by that measure since April 2003.
"It's been very rare that we've ever seen all of our major markets experiencing the impact of these kind of global economies at the same time," the CEO said.
Saturated Fat
The entire fast food industry is loaded with saturated fat. I am not talking about the food itself (which of course much of it is saturated fat), but rather the sheer saturation of restaurants everywhere you look, all competing for the same customers.
Over the years, I have frequently asked a question that goes something like this: "How many more Pizza Huts, McDonald's, nail salons, WalMarts … do we need?" …
