McDonald's and other big brands warn that low-income consumers starting to crack
cnbc.com
cnbc.com
McDonalds has been abusing operators with a mandatory expanding menu full of complex items that puts a lot of operating cost onto the franchisee (operator). And lately mandated tech upgrades to support mobile ordering, along with aesthetic upgrades that most customers hate.
These menu items come with expensive equipment, supply and staffing commitments .
Consumers see this in memes about the "soft serve machine being broken". The truth is the menu has exploded with hard to assemble items (e.g. mcwrap, sandwiches, salads) and flimsy equipment.
And more recently mandated technology upgrades to support mobile & kiosk ordering to drive staff away from the counter and into the kitchen. Along with drab aesthetic upgrades that cost millions per location.
You'll notice In n Out, a privately owned company, has bucked the trend and refuses to do mobile ordering or doordash for this reason. They've kept their real estate traditional. Their menu hasn't changed in 50+ years. As a result, margins are high, operations are efficient, staff are well comped and happy.
Just keep in mind there's a lot to "inflation" driven by short term and risky business strategies that now have to be recouped by consumers.
And it's worth observing that McDonald's is sort of structurally obliged to be doing all that. It's a trap that many very large companies find themselve stuck in and that in many cases becomes the poison that feeds their ruin.
If McDonald's didn't "keep up with the Joneses" as their both their peers and upstart-darling competitors dressed up their menus and digitized their engagement, they'd be giving up their prestige as a defining brand in fast food and would set themselves down the road to being the next generation Arby's, A&W, Dairy Queen, etc -- nostalgic and lingering, perhaps, but no longer a global titan of their current scale.
They may be playing out a losing strategy as you point out, but they also may not have had a winning strategy; at least not at the corporate level. And for corporate, this one has the advantage of extracting more short-term money from operators along the way, so it's not entirely a surpise that it's the one they'd run with.
Every time I end up at McD's, I wonder why the hell I bothered.
I also have a sneaking suspicion that the BigMac has gotten smaller of late. But maybe I've just gotten fatter.
where is this? In CA, almost all payment terminals seem to work in retail for me. Businesses would not stay in business easily if their payment accepting device was broken.
(And for McD's, it's not too difficult IMO to select & checkout via their native iOS app.)
They're no longer the cheapest option, and the salads are no longer available. There's something going wrong there. I can get cheaper, healthier, better food at e.g. my local Subway, and many other places.
It is still reasonably fast (although not super-fast). Unique to my location, the service is excellent.
I forgot how I used to order McDonalds at the counter, and wait in front of the register I paid at until I got my food (because it only took moments).
Now I order, leave with my receipt, and come back when they call my number, a procedure I used to associate with "trendy" places.
> Every time I end up at McD's, I wonder why the hell I bothered.
when their spicy mcchicken stops being good, i'm gone
>Every time I end up at McD's, I wonder why the hell I bothered.
I feel the same everytime i open my burger box and see a smashed pile of crap that is nothing like the burger in my mind or on the ad. Marketing is strong. Fortunately I maybe go to BK or McD once a year, but always disappointed.
Approximately what percentage of the readers of this site would you estimate are laboring under the assumption that eating at McDonald's is healthy?
It turns out that it's not strictly necessary to constantly lecture other people about things like this.
When I made Big Macs in the late 80s, they were made of two "10 to 1" patties (i.e. 10 to the pound, 1.6 ounces each). That's still the formula, according to their web site.
I did see a Reddit post that claimed that the product was physically bigger from 1972-1975. It doesn't show the ingredients, and it looks from the picture as if it is bigger bread rather than more meat. (You can't see any meat in the photo of the bigger sandwich.)
I recall a time when the Big Mac was the gold standard of "this product has too many calories", and articles would decry things that somehow managed to have more. Now, it's hard to find anything with a mere 500 calories.
https://cdn.financebuzz.com/filters:quality(75)/images/2024/...
Their app restrictions were designed by a prison guard sitting with a lawyer
It's like a room with 10 adults and 20 phones, every adult can get 2 phones, then inflation man brings 10 adults into a room decreasing everyone's entitlement to 1 phone each.
The the company adds 10 adults and then 10 phones, it means that every one still gets the same reduced amount of phones: 1.
I was not going against capitalism and increasing benefits in that comment, just for some equality. After all if no one can pay the increased prices the system crashes too.
And for a lot of the big ones, they can always drop prices back and crush competitors before going back up.
Churn is acceptable, if not desirable.
Cost of some goods grows at different rates from the cost of others. Since COVID, service jobs have seen wage growth that's been much faster than the overall inflation rate.
Fixed your passive voice there!
I see in Pullum that this mischaracterization fits example (23) about how BBC's Tim Lewell claimed that "five girls have died" is a passive construction compared to "the man went in and shot five girls".
These sentences displace the action from the the true agent, onto the object. Passive sentences are disparaged for something similar, but not the same: avoiding mentioning the agent.
Actually, displacing the action onto the object is worse than simply avoiding mentioning the true agent.
"Five girls were killed" is passive, but at least acknowledges that someone or something did it to them.
Same with the passive "prices continue to be raised".
So, are the modern corporations making a big mistake with their current information technology trends and goals?
Imho, yes. They think they can improve their marketing efficiency with it, but the truth is that the effects cannot be measured. As ex-sales and ex-marketers tends to be overepresented at the exec level of $bigco, they will say it does have an effect, but its mostly wishful thinking.
Agreed. It's possible to understand some bad, unfunny jokes.
> those are separate qualities.
They're related qualities. A good joke depends on its being understood.
Capitalists are greedy is a basically accurate but also obvious observation that doesn't really teach us anything about the world.
Before the inflation, there wasn't an opportunity to collude in this manner.
The time before inflation? When was that? The middle ages?
There has been a recent marked increase in inflation. That is the inflation I refer to.
Learn to read maybe.
There are many motions across the fast food industry. it's likely customers are trading down from high status (now unaffordable) restaurants into mcdonalds, and now mcDs can charge those customers a bit more.
this has much more explanatory power and is more plausible than "greedy" . It's also verifiable.
"greedy" can't be observed , or verified. it's not empirical.
It's that simple. Maybe they can successfully pawn off blame for the price increases elsewhere (OPEC, inflation, whatever). But it tends to fall flat when you see record profits. We're getting squeezed for whatever they can get from us.
What I'm trying to say is that greed is the default. sometimes they lose 5% . sometimes they earn 5,10,20% . All of those years they are greedy. It's not 3x greedy one year and -3x greedy another
> Grocery retailer profits rose & remain elevated: Food and beverage retailer revenues increased to more than 6% over total costs in 2021, higher than their most recent peak in 2015 of 5.6%. In the first three-quarters of 2023, retailer profits rose even more, with revenue reaching 7% over total costs, casting doubt on the assertions of some companies that rising prices at the grocery store are the result of retailers’ own rising costs.
Maybe some of you downvoters can provide some research studies that support your perception instead of just trying to bury the only hard evidence in this thread.
This is interesting when applied to the early pandemic because you could argue that price increases were not general and in many cases they were not sustained either (e.g. sharp spikes in eggs and lumber were just as sharply reversed). In recent times it seems like we are seeing "true" inflation though.
It's not a quantitative assessment even though it's about numbers.
round is a shape.
Either megacorps are the evil geniuses with a purposeful plan to destroy America through greed that everyone here claims: And so would be qualified to know. Or they're not.
Im not sure hope you guys continually come up with and believe antithetical cliches.
McDonalds is no longer affordable by low-income consumers.
They really need to lower food prices. It's ridiculous that they are charging $15 for a burger, fries and a drink.
The bill for eating out at a restraunt for 2 people was $60 ... now its $120 minimum.
Should we bring in more below-minimum wage agricultural labour?
Should we reverse wage growth in the poorest segment of society - the people that grow and cook your food?
Should we lower commercial and residential rents?
Should we redistribute the record profits that (some) parts of the capital-owning class are reaping?
Your life is just catching up to the reality that X hours of labour is required to provide you with 1 hour of luxury, and when that labour starts getting paid more for their work, prices go up.
(It's the same reason childcare is unaffordable. One care provider is only allowed to watch after 3/4 infants. If you want 8 hours of childsitting a day, that means that half of your salary must go to pay for it.)
* Do a ton of work
* Make very little money
* With a constant risk of going out of business and losing everything hanging over your head.
The reality is that rents are in the stratosphere, low-end wages are growing, and so are profit margins for many (but not all) producers of goods that the economy runs on. All of these costs get passed up the supply chain to you, the customer.
It's very sad and all that a senior SWE no longer gets paid 15 times what their barista does (It's only 8 times now!), but we all have to tighten our belts and adapt to this brave new world.
Or we could eat the landlords, but that's not a hugely popular sentiment at the moment.