Math NotAllowedInMcDonald’sNew "DollarMenu"
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As fast-food workers of the world unite under a common banner of "higher minimum ‘livabale’ wages", one can’t help but reflect on the terrible jobs data this morning and the potential inability of workers to get anything but a low-skill ‘part-time’ job flipping burgers. But most importantly, these workers may soon not be able to afford the product they manufacture. Concerns over rising wage costs can be put aside for now as it is the soaring costs of beef (as we discussedherepreviously) that are causing "Dollar Menu" items to be adjusted upwards. "Youcan’tsell a burgerfor $1 anymorebecausethecostofbeefhasgoneupsomuch," and sure enough, asBloombergreports, McDonalds is testing a new version, dubbed ‘Dollar Menu and More’, that includes items selling for as much as $5. As one analyst notes, the industry’s "definitionofvaluehasmovedupfromtheDollarMenuto $1.50 or $2.”
McDonald’sCorp.’s DollarMenuisprimedforinflation.
Theburgerchainistesting a newversion, dubbedDollarMenuandMore, thatincludesitemssellingforasmuchas $5. The new lineup is being tested in five markets in the U.S., Ofelia Casillas, a spokeswoman for the Oak Brook, Illinois-based company, said in an e-mail. One test includes $1, $2 and $5 fare; another has $1, $1.79 and $4.99 items.
“It just sounds like they’ll be raising prices,” Peter Saleh, a New York-based analyst at Telsey Advisory Group, said in an interview. Theindustry’s “definitionofvaluehasmovedupfromtheDollarMenuto $1.50 or $2.”
McDonald’s earnings have trailed analysts’ estimates for the past two quarters amid shaky consumer confidence and more competition from rivals introducing new food. Thechainalsoisfacing a franchiseerevolt. OnepointoftensionistheincreasinglydifficulteconomicsoftheDollarMenu, according to a document obtained by Bloomberg News recapping an April franchisee meeting. Store operators also have met to discuss rising costs, including higher rents, as well as how an increasingly complex menu slows down service.
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Restaurants including McDonald’s have faced higher beef prices after a drought last year made it more expensive for farmers to feed cattle.
“Youcan’tsell a burgerfor $1 anymorebecausethecostofbeefhasgoneupsomuch,” Saleh said.
Is this like the opposite of 7-Minute Abs?
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