Monday, August 4, 2008

McDonald's, The Burger Drug Dealers, Raising The Price Of Their Most Addictive Product

McDonald's Tests Changes
In $1 Burger As Costs Rise

Oak Brook, Ill. -- McDonald's Corp. is testing modifications to its popular $1 double cheeseburger, and higher prices for the sandwich, as it prepares to change its Dollar Menu by next year.

In an interview, Don Thompson, president of McDonald's U.S. business, said the company has tested ways to make the burger less expensive to make. Some restaurants are selling it with one slice of cheese instead of two, and billing it as a "double hamburger with cheese." Others are offering a double hamburger without cheese. Some are selling the traditional double cheeseburger at prices ranging from $1.09 to $1.19.

The company is also considering expanding what it considers the middle tier of its menu, items ranging from about $1.30 to $2. "We know customers are facing tough times in this economy," Mr. Thompson said.

Launched in 2003, the Dollar Menu has been a key driver of sales at McDonald's 14,000 U.S. restaurants and has helped it ride out dips in consumer spending. But recently, franchisees have complained that the menu has brought too much unprofitable traffic into their restaurants.

The biggest question for the eight-item menu is what to do with the double cheeseburger, considered its anchor. High dairy prices have pushed up the cost of cheese, and McDonald's predicts more pressure because its beef costs will be higher this year. Mr. Thompson said if McDonald's moves the double cheeseburger off that menu, there would still be some type of $1 burger.

Internal sales documents reviewed by The Wall Street Journal show that, as of late June, sales of the chain's lattes, cappuccinos and other espresso drinks were off their peak in several main markets where they're being sold. Mr. Thompson said "the numbers really don't tell the story."

Lower-priced beverages, including $1.89 iced coffee and a $1 fountain-drink and sweet-tea promotion, have pulled some sales away from the espresso drinks, which range from about $2 to $3. That was something the company hadn't anticipated, he said.

McDonald's overall beverage expansion, adding espresso drinks, smoothies, cold tea, bottled drinks and ice-blended coffee beverages at U.S. locations, is on track to exceed the company's goal of adding $125,000 a year in sales per restaurant, even though it doesn't yet have national advertising behind it, Mr. Thompson said. He sees McDonald's target of the drinks adding $1 billion a year to the company's sales as "definitely achievable." The rollout will be complete at the end of 2009.

Black People and the dollar menu have been very good to one another over the years and I can't count how many of my younger friends were raised on it, but if they raise the price on the staple of the menu, the double cheeseburger, fat people may not stand for it. Fortunately for me, I swore McDonald's off since April so this doesn't affect me. I just worry about my other dollar menunaire brothers and sisters that have been led astray by the man with the red afro. Let this be a lesson to you. The five dollar footlong would have never done this to you if you had stuck it out with him. Much much stabler and healthier food option.

Anyway I'm not trying to get too preachy by way of a sermon over a hamburger but take that information for what it's worth which evidently amounts to another couple dimes.

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